Dow Jones, the S&P 500, and Nasdaq price forecast after the disappointing U.S. job report

The Dow Jones, the S&P 500, and the Nasdaq weakened on Friday after the U.S. released the Nonfarm Payrolls report, which showed that the country added only 194K jobs in September. The job report missed economists’ estimate of 500K in September and raised questions about the pace of the economic recovery.

Despite this, Wall Street’s three main indexes ended higher on a weekly basis and continue to trade in a bull market. The S&P 500 index rose 0.8%; the Dow Jones Industrial Average advanced 1.2%, while the Nasdaq Composite Index gained 0.1% and closed at 14,579 points.

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The positive news is that the unemployment rate fell to 4.8% from 5.1%, and the pace of recovery is likely sufficient for Fed officials to follow through on plans to announce tapering at the November FOMC meeting.

The U.S. Federal Reserve could begin reducing its monthly bond purchases while Fed Chair Jerome Powell said that interest rates could rise quicker than expected. Kathy Lien, Managing Director at BK Asset Management said:

I think that the Federal Reserve made it very clear that they don’t need blockbuster jobs report to taper in November.

A hawkish turn should positively influence the U.S. dollar, but besides this, some investors view the Fed’s stance as a vote of confidence for the U.S. economy. Monetary tightening is usually seen as a drag on stocks, but the focus of investors will turn now on the third-quarter earnings results.

JPMorgan Chase JPM and other big banks are scheduled to announce third-quarter earnings results, and according to Bank of America, the outlook for bank returns is significantly more favorable currently than even a few months ago.

The credit quality continues to improve; still, global supply chain issues represent a serious problem for the economy.

S&P 500 up 0.8% on a weekly basis

For the week, S&P 500 (SPX) booked a 0.8% increase and closed at 4,391 points.

The S&P 500 index 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 4,100 points. The strong resistance level stands at 4,500 points, and if the price jumps above this level, we have the open way to 4,600 points.

DJIA up  1.2% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 1.2% last week and closed at 34,746 points.

The Dow Jones Industrial Average continues to trade close to 35,000 resistance, but if the price falls below 34,500 points, it would be a firm “sell” signal, and the next target could be around 34,000 points.

Nasdaq Composite up 0.1% on a weekly basis

The Nasdaq Composite (COMP) continues to trade in a bull market, and if the price jumps above 15,000 points, it would be a bullish confirmation for this index.

The strong support level stands at 14,000 points, and if the price falls below this level, it would be a strong “sell” signal.

Summary

The Dow Jones, the S&P 500, and the Nasdaq weakened on Friday after the U.S. released the disappointing job report, but despite this, Wall Street’s three main indexes ended higher on a weekly basis. The U.S. added only 194K jobs in September; still, the positive news is that the unemployment rate fell to 4.8% from 5.1%.

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