Dow Jones, the S&P 500, and Nasdaq price forecast ahead of a busy week

Wall Street’s three main indexes had a third straight week of gains for the first time since early July; the S&P 500 index rose 1.6%; the Dow Jones Industrial Average advanced 1.1%, while the Nasdaq Composite Index gained 1.3%.

Disappointing quarterly reports from Snap and Intel put pressure on the S&P 500 and Nasdaq on Friday, but both indexes continue to trade in a bull market.

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The U.S. economy remains stable, and according to research company Refinitiv, third-quarter S&P 500 earnings should show a 34.8% rise from a year ago, up from an expected 31.9% rise at the beginning of the week.

Results from many big companies provided a strong start to third-quarter earnings, and investors’ focus will remain on the third-quarter earnings season because many companies have yet to publish their reports.

Next week, General Electric, Advanced Micro Devices, Alphabet Inc (GOOG), Microsoft, Twitter, Visa, Coca – Cola, Boeing, Facebook, McDonald’s, Ford, and Amazon are among the companies scheduled to report quarterly results.

Fed Chair Jerome Powell said on Friday that the U.S. central bank is “on track” to begin reducing its purchases of assets 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.

Tom Mantione, managing director of UBS Private Wealth Management, said:

Stocks are climbing to new highs, and anytime the market is trading at or near its all-time high, it is not unusual to see a little bit of more intraday volatility…and it should not concern investors.

Several FED officials also expressed concerns about high inflation which could force the U.S. central bank to raise rates sooner than anticipated. It is also important to say that the Initial Jobless Claims for the week ended October 15 fell to 290K, which is the lowest number since the pandemic began.

On the other side, supply chain issues represent a serious problem for the economy, but the pace of recovery is likely sufficient for Fed officials to follow through on plans to announce tapering at the November FOMC meeting.

The upcoming week will be a busy one; the U.S. will publish the preliminary estimate of Q3 Gross Domestic Product while the quarterly results of many big companies will take center stage.

S&P 500 up 1.6% on a weekly basis

For the week, S&P 500 (SPX) booked a 1.6% increase and closed at 4,544 points.

The S&P 500 index continues to trade in a bull market, but if the price falls below 4,400 points, it would be a “sell” signal, and we have the open way to 4,200 points. The current resistance level stands at 4,600 points, and if the price jumps above this level, we have the open way to 4,700 points.

DJIA up  1.1% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 1.1% for the week and closed at 35,677 points.

DJIA continues to trade near record highs; still, if the price falls below 34,000 points, it would be a strong “sell” signal.

Nasdaq Composite up 1.3% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 1.3% increase and closed at 15,090 points.

If the price jumps above 15,500 points, it would be a bullish confirmation for this index. The current support level stands at 14,500 points, and if the price falls below this level, it would be a strong “sell” signal.

Summary

Wall Street’s three main indexes had a third straight week of gains, and Fed Chair Jerome Powell said on Friday that the U.S. central bank is “on track” to begin reducing its purchases of assets. The upcoming week will be a busy one; the U.S. will publish the preliminary estimate of Q3 Gross Domestic Product while the quarterly results of many big companies will take center stage.

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