Dow Jones, the S&P 500, and Nasdaq price forecast after Friday’s gains

Wall Street’s three main indexes advanced on Friday after Federal Reserve Chair Jerome Powell said that a 75 basis point increase is not being “actively” considered.

Federal Reserve Chairman Jerome Powell also said that Fed would be flexible to changing conditions, and if monthly readings on inflation provide compelling evidence that inflation is moving down, then the pace of rate increases could slow. Cleveland Federal Reserve Bank President Loretta Mester added:

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So given economic conditions, ongoing increases in the fed funds rate are called for, and unless there are some big surprises, I expect it to be appropriate to raise the policy rate another 50 basis points at each of our next two meetings.

Before this, investors have been concerned that the U.S. central bank could go a step further and raise the funds rate by 75 basis points at its next meeting, pushing inflation lower but also slowing economic growth dramatically.

The U.S. Federal Reserve raised the interest rate by 50 bps this month, which was the first such increase in over twenty years, and many Fed members said they wouldn’t rule out a 75 basis-point hike to bring down inflation.

The Dow Jones Industrial Average advanced by 1.47% to 32,196 on Friday, the S&P 500 jumped 2.4% to 4,023, and the Nasdaq Composite rose 3.8% and closed the week at 11,805 points.

On the other side, Russia’s attack on Ukraine remains in focus, while tensions between Russia and western nations continue to keep investors in a negative mood.

Finland has formally confirmed it intends to join NATO, while Russian Deputy Chairman Dmitry Medvedev warned that Russia would take “retaliatory steps” over this move.

S&P 500 rose 2.4% on Friday

 S&P 500 (SPX) booked a 2.4% increase on Friday and closed the week at 4,023 points.

The risk of another decline still persists, but if the price jumps above 4,200 points, it could reach 4,400 points very soon. 3,800 points represent the important support level, and if the price falls below it, it would be a “sell” signal, and we have the open way to 3,500 points.

DJIA advanced 1.47% on Friday

The Dow Jones Industrial Average (DJIA) advanced 1.47% on Friday and closed the week at 32,196 points.

The Dow Jones Industrial Average still remains under pressure, and if the price falls again below 32,000 points, it would be a firm “sell” signal, and the next target could be around 31,000 points.

Nasdaq Composite rose 3.8% on Friday

Nasdaq Composite (COMP) rose 3.8% on Friday and closed the week at 11,805 points.

The upside potential for Nasdaq Composite probably remains limited, and if the price falls again below 11,500 points, it would be a strong “sell” signal.

Summary

Wall Street’s three main indexes ended higher on Friday, but the risk of another decline is not over as tensions between Russia and western nations continue to keep investors in a negative mood. Finland has formally confirmed it intends to join NATO, while Russian Deputy Chairman Dmitry Medvedev warned that Russia would take “retaliatory steps” over this move.

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