US Market Outlook: Indices look vulnerable

The Dow Jones Industrial Average, S&P 500 and NASDAQ Composite index fell sharply towards the end of the week failing to sustain the initial rise. The Dow Jones managed to close the week in green. However, the S&P 500 and NASDAQ Composite indices fell for the second consecutive week. On the charts, the picture remains weak for the US benchmark indices. We can expect them to fall further from here.

Dow Jones (52,220.21)

The fall from the high of 52,933 last week leaves the near-term picture slightly unclear. An important support is at 51,730 which can be tested this week. Whether the index sustains above this support or not will determine the next move.

A bounce from around 51,730 will be bullish to see 53,500 in the coming weeks. On the other hand, a break below 51,730 can increase the downside pressure. Such a break can drag the index down to 51,000-50,500. It will also keep the downside open to see 50,000-49,500 eventually.

The price action around 51,700 will need a close watch this week.

S&P 500 (7,623.68)

The downward reversal from around 7,770 last week indicates lack of strong buyers in the market. A crucial support is at 7,600. The charts look weak. So, the chances are high for the index to break down below 7,600. Such a break can drag the S&P 500 index down to 7,500-7,460 going forward.

In case the index manages to bounce back from around 7,600, a rise to 7,700-7,800 can be seen again. That in turn can keep the S&P 500 index in a range of 7,600-7,800 for some time.

NASDAQ Composite (25,955.34)

The fall continues in line with our expectation. The bearish view remains intact. Immediate resistance is at 26,100. Above that, 26,800-27,000 is the next strong resistance. We expect the index to sustain below 26,100 itself.

NASDAQ Composite index can fall to 25,500-25,350 from here. From a big picture, the downside is open to see 24,500 in the coming months. A break below 25,800 can trigger this fall.

Dollar Outlook

The dollar index (101.75) fell last week in line with our expectation. The index touched a low of 101.45 and then recovered almost all the loss. The downside seems to be limited. Strong support is in the 101.30-101.20 region. A break below 101.20 looks less likely.

As long as the index stays above 101.20, there are good chances for it to breach the immediate resistance level of 102. Such a break can then boost the momentum and take the dollar index higher to 103-103.50 in the coming weeks.

In case the index breaks below 101.20, a fall to 101-100.90 can be seen. The dollar index will come under huge selling pressure only on a break below 100.90. If that happens, then 100 and lower levels can be revisited.

Treasury Yield

The US 10Yr Treasury Yield (5 per cent) fell as expected last week to test the support level of 4.95 per cent. It touched a low of 4.94 per cent and then bounced back.

A strong follow-through rise from here can take the 10Yr Yield up to 5.15-5.2 per cent this week. A subsequent rise above 5.2 per cent can then clear the way for an extended rise to 5.35 per cent. That in turn will keep intact our broader bullish view of seeing 5.6 per cent on the upside over the medium term.

In case the yield breaks below 4.95 per cent, then an extended fall to 4.85-4.8 per cent can be seen. Thereafter, we can expect the yield to bounce back and go above 5 per cent again. If this fall happens, then the rise to 5.35 per cent and 5.6 per cent mentioned above will get delayed.

Published on October 24, 2026