Dow Jones, the S&P 500, and Nasdaq price analysis after U.S. stocks rose for the third straight day on Friday

Wall Street’s three main indexes ended higher last week after the U.S. central bank reported on Wednesday it could begin reducing its monthly bond purchases by as soon as November 2021. Fed Chair Jerome Powell said that interest rates could rise quicker than expected, and though monetary tightening is usually seen as a drag on stocks, some investors view the Fed’s stance as a vote of confidence for the U.S. economy.

“Normally, a hawkish turn would be bad for risk-on assets, particularly equities… the fact the Fed is putting this out there signals to the market that the economy is on pretty firm footing,” said Ralph Bassett, head of North American equities at Aberdeen Standard Investments.

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Fed announcement positively influenced the U.S. dollar, treasury yield advanced, and shares of banks continue to be supported. Investors will continue to pay attention to a raft of U.S. economic indicators next week, including durable goods orders and the ISM manufacturing index, as well as the progress of debt ceiling negotiations in Washington.

The U.S. economy remains stable, the U.S. unemployment rate fell to 5.2% in August, and the rapid price increases are also a reason to begin raising rates. Jerome Powell also said that Fed achieved its goal on inflation, while more than half of Fed members believe that the economy reached the employment goal.

The U.S. will publish the Nonfarm Payrolls report on Friday, 08th October, which will be one of the main events of October 2021. The U.S. economy is expected to have added 330K new jobs in September, while the unemployment rate is also expected to show improvements.

S&P 500 up 0.51% on a weekly basis

For the week, S&P 500 (SPX) booked a 0.51% increase and closed at 4,455 points.

Data source: tradingview.com

S&P 500 continues to trade in a bull market, but if the price falls below 4,300 points, it would be a “sell” signal, and we have the open way to 4,200 points.

DJIA up  0.62% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 0.62% for the week and closed at 34,798 points.

Data source: tradingview.com

The strong resistance level stands at 36,000 points, and if the price jumps above this level, it would be a bullish confirmation for this index. On the other side, if the price falls below 34,000 points, it would be a firm “sell” signal, and the next target could be around 33,500 points.

Nasdaq Composite up 0.02% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 0.02% increase and closed at 15,047 points.

Data source: tradingview.com

Nasdaq Composite remains in a bull market, and as long the price is above this trend line and 14,500 points, there is no risk of a trend reversal. If the price jumps above 15,200 points, the next target could be around 15,300 or even 15,500 points.

Summary

Dow Jones, the S&P 500, and Nasdaq ended higher last week after the U.S. central bank reported on Wednesday it could begin reducing its monthly bond purchases by as soon as November 2021. Tightening is usually seen as a drag on stocks, but some investors view the Fed’s stance as a vote of confidence for the U.S. economy.

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