The Dow Jones Industrial Average managed to sustain higher last week. However, the S&P 500 and the NASDAQ Composite indices were beaten down badly. The S&P 500 index fell 1.95 per cent. The NASDAQ Composite index on the other hand tumbled about 4.5 per cent.

On the charts, the picture is looking weak for the US benchmark indices. The Dow Jones is at a key resistance and is in danger of falling back from here. The S&P 500 and NASDAQ Composite have more room to fall from here.

Here is an analysis on where the US market is headed.

The rise to test the 52,500 resistance happened last week as expected. The Dow Jones touched a high of 52,587 and has come down from there. Failure to breach 52,500 keeps the downtrend intact.

A fall from here and a subsequent break below 51,500 can trigger a fresh fall to 50,500 initially. It will also keep the downside open to see 50,000-49,500 eventually.

A sustained rise above 52,500 is needed to negate this bearish view. If that happens, the Dow Jones can get some relief and go up towards 53,300 and even 54,000. But such a strong rise looks less likely.

Contrary to our expectation, the S&P 500 index has declined sharply, breaking below the support level of 7,730. Cluster of supports are there in the 7,635-7,600 region. A bounce from there can give some relief. That in turn can take the S&P 500 index higher to 7,700 and even 7,800 again.

The index will come under more selling pressure if it breaks below 7,600. Such a break can drag the S&P 500 index down to 7,500-7,450 or even 7,300 going forward.

The price action in the 7,635-7,600 region will need a close watch this week.

The strong fall below 27,000 has reduced the chances of seeing 28,300-28,500 on the upside. The region between 26,900 and 27,000 can now act as a good resistance and cap the upside. As long as the index stays below 27,000, the bias will remain negative. The NASDAQ Composite index can fall to 25,500 and even 25,000 from here.

A strong and sustained rise above 27,000 is needed now to bring back the chances of the rise to 28,300-28,500.

The dollar index (101.78) failed to sustain the breakout above 102.50 last week. The index spiked to a high of 102.95 after the inflation data release on Wednesday and fell sharply from there.

The near-term picture is weak. The dollar index can fall to 101.30-101.20 from here. The region between 101.30 and 101 is a strong support. A fall below 101 is less likely. As such, we can expect the dollar index to reverse higher anywhere from the 101.30-101 support zone. That in turn will keep the broader bullish view intact to see 103.50 on the upside over the medium term.

The outlook will turn negative only if the index breaks below 101. If that happens, a fall to 100.40-100.30 can be seen.

Our preference is to see the dollar index sustain above 101 and go higher again.

The US 10Yr Treasury Yield (5.08 per cent) has declined sharply breaking below the key support level of 5.2 per cent. The near-term outlook is negative. The 10Yr Treasury Yield can test 5-4.95 per cent on the downside.

After this fall, the yield can reverse higher again and resume the broader uptrend. That leg of rise may have the potential to take the 10Yr Treasury Yield higher to 5.35 per cent initially. It will also keep the upside open to target 5.6 per cent in the medium term.

Published on October 17, 2026