The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices rose well for the second consecutive week. The Dow was up 2.3 per cent. S&P 500 and NASDAQ Composite index were up 1.7 and 1.6 per cent respectively. Indeed, S&P 500 and NASDAQ Composite indices surged to record highs last week.
On the forex front, the dollar index remained lower but stable. The US 10Yr Treasury yield on the other hand witnessed a strong recover on Thursday after the jobs data release. The US markets were closed on Friday on account of a public holiday.
The US added 147,000 jobs to its non-farm payroll for the month of June. This was higher than the 111,000-job addition expected by the market. The US Unemployment rate also fell to 4.1 per cent in June from 4.2 per cent a month ago.
Here is an analysis of how the US markets can perform in the coming weeks:
Dow Jones (44,828.53)
Dow Jones remained strong and moved up all through the week. It touched a high of 44,885.85 before closing the week at 44,828.53.
Immediate resistance is at 45,050. Failure to breach this hurdle can trigger a corrective fall to 44,000 or even 43,500 in the short term.
On the other hand, if the Dow manages to breach 45,050 from here itself, then an extended rally to 46,200-46,300 is possible. Thereafter a corrective fall to 45,000 can be seen.
From a big picture, cluster of supports are there in the broad 43,000-42,000 region. So, as long as the Dow remains above 42,000 the trend will remain up. That will keep the doors open for the Dow to target 50,000 over the long term. A break above 46,200 can clear the way for this rally.
S&P 500 (6,279.35)
The S&P 500 continued to move up and made new high of 6,284.65 last week. The rise last week taken the index well above a key resistance level of 6,250.
That keeps the bullish view intact. There is room to see 6,350-6,400 on the upside in the short term. Thereafter, a corrective dip to 6,250-6,200 is a possibility.
From a long-term perspective, the S&P 500 index will have potential to target 6,700-6,800 on the upside. A decisive break above 6,400 can trigger this rally.
NASDAQ Composite (20,601.10)
The NASDAQ Composite index fell initially last week. The index made a low of 20,105.42 on Tuesday but then managed to bounce back sharply recovering all the loss. Indeed, the index opened with a wide gap-up on Thursday and surged to a record high of 20,624.51.
The outlook is bullish. Strong support is around 20,000 which has held very well last week. Intermediate support is around 20,270. NASDAQ Composite index can surge to 21,300-21,500 in the coming weeks.
The medium-term picture is also very strong with supports at 20,000 and 19,300. NASDAQ Composite index has potential to target 22,500 and even 23,200 in the coming months.
Dollar outlook
The dollar index (97.18) fell to a low of 96.37 and then has bounced back from there. A crucial and strong support is around 96 which can halt the current downtrend. A strong bounce from there can take the index up to 98 and even 100 in the coming weeks.
For now, 96-98 can be the trading range for the near term with chances of the upside extending up to 100.
The dollar index will come under pressure for more fall only if it breaks below 96. If that happens, 94 and even lower levels can be seen.
The euro (EURUSD: 1.1778) has room on the upside to see 1.20-1.21 before reversing lower. So, that indicates that the dollar index can see a short-lived dip below 96 and then see a trend reversal.
Treasury Yields
The US 10Yr Treasury Yield (4.35 per cent) has risen well from a low of 4.18 per cent last week. The rise gained momentum on Thursday after the jobs data release. Strong job numbers strengthen the case for the US Federal Reserve to keep the rates unchanged in its meeting this month. As such there could be a delay in getting the next rate cut from the Fed. This has aided the yield to move up on Thursday.
However, a key resistance is there for the 10Yr Yield at 4.4 per cent. Failure to breach this hurdle can drag the 10Yr Yield down to 4.1 and 4 per cent in the coming weeks. A strong and sustained break above 4.4 per cent is needed to avoid the aforementioned fall. Only then a rise to 4.6 per cent can come back into the picture again.
Published on July 5, 2025
