Dow Jones, the S&P 500, and Nasdaq price forecast after last week’s gain

Wall Street’s three main indexes advanced last week as signs that inflation may have peaked in July increased investor confidence that a bull market could be underway.

The U.S. reported that the Consumer Price Index rose by less than anticipated in July, up 8.5% YoY, while the Producer Price Index posted a similar outcome, rising by 9.8% YoY in the same month.

Because of this, investors expect a less hawkish Fed, and there is a big chance that Fed policymakers could decide to raise rates by 50 basis points when they meet in September, instead of 75 basis points. Tim Ghriskey, the chief investment strategist at Inverness Counsel in New York, said:

I wouldn’t declare victory over this bear market yet. There’s likely some bad news still out there, but there’s a very good chance we’ve seen the bottom.

The U.S. stocks recorded their largest weekly inflow since December last year, and according to Bank of America, investors have bought $7.1 billion in equities in the week to Wednesday.

Strong corporate earnings also influenced the market positively, and results from many big companies provided a strong start to the third quarter of the 2022 year.

The S&P 500 companies posted year-over-year earnings growth of 9.7% in the April to June period, much stronger than the 5.6% predicted at quarter-end.

The upcoming week will be busy; The Home Depot, Walmart, Cisco Systems, The Estee Lauder Companies, Applied Materials, and Deere & Co are among the companies scheduled to report quarterly results.

The U.S. will also publish Retail Sales figures for July, and the U.S. Federal Reserve will release the Minutes of its latest monetary policy meeting.

S&P 500 up 3.25% on a weekly basis

For the week, S&P 500 (SPX) booked a 3.25% increase and closed at 4,280 points.

Data source: tradingview.com

The S&P 500 is up 17.7% from a mid-June low, and if the price jumps above the current resistance level that stands at 4,400 points, it could reach 4,500 points very soon.

On the other side, if the price falls below 4,100 points, it would be a “sell” signal, and we have the open way to 4,000 points.

DJIA up  2.92% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 2.92% for the week and closed at 33,761 points.

Data source: tradingview.com

The current resistance level stands at 34,000 points, and if the price jumps above this level, the next target could be around 34,500 points.

The important support level stands at 32,000 points, and if the price falls below this level, the next target could be 31,000 points.

Nasdaq Composite up 3.8% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 3.8% increase and closed at 13,047 points.

Data source: tradingview.com

The strong resistance level stands at 13,500 points, and if the price jumps above this level, we have the open way to 14,000 points.

Summary

The Dow Jones, the S&P 500, and the Nasdaq advanced last week as signs that inflation may have peaked in July increased investor confidence that a bull market could be underway. Strong corporate earnings also influenced the market positively, and according to Bank of America, investors have bought $7.1 billion in equities in the week to Wednesday.

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