Dow Jones, S&P 500 and Nasdaq price forecast after strong US jobs report

All three major Wall Street indexes weakened last week, even as the US labor market confirmed the economy is on solid footing as the country reported that nonfarm payrolls rose more than expected in August. .

The United States added 315,000 jobs in August, beating economists’ estimate of 298,000 for the same month. The bad news is that the unemployment rate fell from 3.5% to 3.7%, while the participation rate fell from 62.1% to 62.4%. Rick Meckler, Partner at Cherry Lane Investments, said:

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A slight rise in the jobless rate eased fears of aggressive interest rate hikes from the Federal Reserve. Investors are still rethinking the August jobs report and are likely pondering that there is no clear end to rate hikes.

According to the CME FedWatch Tool, the probability of a 75 basis point rise in the market has fallen from 75% to 56%, while Morgan Stanley’s US chief economist Ellen Zentner said the data on the consumer prices expected on Sept. 13 would be key in determining the Fed. decision.

On the other side, Commerzbank analysts indicated that the FED would likely raise rates by 75 basis points on September 21 rather than 50 basis points.

Investors will be watching Fed Chairman Jerome Powell’s speech Thursday as well as U.S. consumer price data next week for clues on the path of monetary policy.

The S&P 500 again below 4,000 points

The S&P 500 (SPX) weakened again below 4,000 points, and investors will pay close attention to Fed Chairman Jerome Powell’s speech on Thursday.

Data source: tradingview.com

The current support is at 3,800 points, and if the price breaks below this level, it would be a “sell” signal, and we have the open way towards 3,700 points. The upside potential is still limited, but if the price jumps above 4,000 points, the next target could be 4,200 points.

DJIA has a strong level of support at 30,000 points

The Dow Jones Industrial Average (DJIA) weakened last week and closed in the red in five of the last six sessions.

Data source: tradingview.com

The strong support level sits at 30,000 points, and if the price breaks below this level, it could be the start of a much stronger selloff.

Nasdaq Composite down -3.3% on a weekly basis

The Nasdaq Composite (COMP) lost more than 3% last week and closed at 11,630 points.

Data source: tradingview.com

This marked the Nasdaq’s sixth consecutive daily loss, and if the price falls below 11,000 points, the next target could be 10,500 points.

Summary

The Dow Jones, S&P 500 and Nasdaq ended lower last week, even as the US labor market confirmed the economy is on solid footing as the country reported nonfarm payrolls rose more than expected in August. Investors will be watching Fed Chairman Jerome Powell’s speech Thursday as well as U.S. consumer price data next week for clues on the path of monetary policy.

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Richard L. Militello