The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices were up for the third consecutive week. The Dow and S&P 500 were up over 0.7 per cent each. The NASDAQ on the other hand outperformed by surging 2.2 per cent. The benchmark indices made new highs before giving away some of the gains towards the end of the week.
On the forex front, the dollar index and the US treasury yields witnessed a strong rise in the second half of the week. The trigger for this rise came from the outcome of the US Federal Reserve meeting on Wednesday. The Fed cut the rates by 25-basis points as expected to 3.75-4 per cent.
Dow Jones (47,562.87)
The Dow Jones touched the psychological 48,000 mark but failed to get a strong follow-through buying. The index made a high of 48,040.64 and then has come down from there.
The overall picture is bullish. Strong support is around 47,000. A dip to test this support this week cannot be ruled out. However, a fall below 47,000 is less likely and it will need some strong negative trigger.
A rise from around 47,000 will keep the overall bullish view intact. This leg of upmove will have the potential to breach 48,000 decisively and take the Dow Jones up to 49,000-49,500 over the medium term.
The region between 47,000 and 46,800 is an important support zone. The Dow has to decline below 46,800 to turn the outlook bearish. Only then the danger of a fall to 46,000 and lower will come into the picture.
S&P 500 (6,840.19)
The break above 6,800 and a rise to 6,900 happened last week in line with our expectation. The S&P 500 index made a new high of 6,920.34 and has come down from there.
The region between 6,800 and 6,770 is an important support zone now. The index has to sustain above this support zone to keep the bullish view intact. The resistance at 6,900 is holding well for now. A sustained rise above 6,900 is needed to take the S&P 500 index higher towards 7,000.
On the other hand, failure to breach 6,900 from here and break below 6,770 can turn the short-term picture negative. In that case, there is a danger of seeing a fall to 6,650-6,600.
So, 6,770 and 6,900 are crucial levels to watch now. A breakout on either side of these two levels will then determine the next leg of move.
NASDAQ Composite (23,724.96)
The rise to 24,000 has happened much faster than expected. The NASDAQ Composite index surged to a high of 24,020 and fell back from there.
Immediate support is around 23,480. Below that, 23,300 and 23,000 are the next critical supports. The outlook will remain bullish as long as the index stays above 23,000.
A rise to 24,400-24,500 looks likely in the short term. A decisive break above 24,500 can boost the bullish momentum. Such a break can take the NASDAQ Composite index up to 26,000 over the medium term.
The near-term outlook will turn negative if a break below 23,000 is seen. Such a break can take the index down to 22,500. The broader bullish outlook will go wrong only on a break below 22,500.
Dollar outlook
The 98.65-98.45 support zone held very well last week and the Dollar index (99.80) rose to 99.80 as expected.
Immediate resistance is around 99.85 which is holding well for now. A decisive break above 99.85 can take the dollar index up to 100.50 initially. A further break above 100.5 will then clear the way for an extended rise to 101.20.
Supports are at 99.20 and 98.40. The outlook will turn negative only if the index declines below 98.40. This is possible if the index fails to rise past the immediate resistance at 99.85.
Treasury yield
The US 10Yr Treasury Yield (4.08 per cent) fell to a low of 3.97 per cent initially and then has risen back well last week. Support for the yield will now be around 4.05 per cent. As long as the yield sustains above this support, the outlook will be positive. Immediate resistance is around 4.15 per cent. A break above it can take the yield up to 4.2 per cent and even higher.
The yield has to decline below 4.05 per cent to come under pressure again. Only then the chance of a fall to 3.95 per cent and lower will come back into the picture.
Fed meeting
The 25-bps rate cut from the Fed came in line with the market expectation. However, the central bank surprised the market indicating that another 25-bps rate cut in its December meeting is not a given. This has aided the dollar index and the treasury yields to go up last week.
To strengthen the case for another rate cut in December Fed might need more economic data. Unless the ongoing government shutdown comes to an end, there is not going to be any new data release. So, in the absence of the economic data, the Fed may decide to keep the rates on hold in its December meeting.
Published on November 1, 2025
