The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index have closed higher for the week in spite of the sharp fall on Friday. The real action was seen in the currency and bond space. The dollar index rose about 1.5 per cent recovering almost all the loss made in the previous two weeks. The US 10 Year Treasury Yield on the other hand surged 24 basis points (bps) last week.

On the charts, the rise in the dollar index and the Treasury Yield last week strengthens the bullish case. This could slow down the pace of rise in the US equities. Although there is room for the benchmark indices to move higher from here, a cautious approach would be needed. That is, we may have to start looking at the equity markets from the sell side rather than the buy on dips approach.

Dow Jones (49,530.94)

The sideways range remains intact at 48,700-50,200 range. We will have to wait for a breakout of either side of this range to get clarity on the next move. For now, the broader uptrend is intact. So, a bullish breakout above 50,200 and a rise to 51,300-51,500 is still a possibility.

In case the index breaks below 48,700, then a fall to 46,000-45,000 can be seen. It is a wait and watch situation now.

S&P 500 (7,408.49)

The index has come off after making a high of 7,517.12. Failure to rise back immediately can trigger a corrective fall to 7,330 or even 7,250 in the short term.

A bounce from around 7,250 will keep the broader uptrend intact and take the S&P 500 index up to 7,500 again. It will also keep the upside open to see 7,600 and 7,750.

The uptrend will come under threat only if the index declines below 7,250. If that happens, then 7,130-7,100 can be seen on the downside.

NASDAQ Composite (26,225.14)

The resistance in the 26,700-26,750 mentioned last week has held very well. The NASDAQ Composite index has come down after touching a high of 26,707.14.

A fall below 26,000 from here will indicate that a top is in place. That in turn can trigger a fall to 25,750 or even 25,300 in the coming weeks. Such a fall will then keep the downside open to see 24,000 going forward.

To avoid this fall, the NASDAQ Composite index has to sustain above 26,000 and rise past 26,750. If it manages to do this, then 27,200 can be seen on the upside.

Dollar Outlook

The rise last week indicates that the dollar index (99.27) is gaining momentum. Immediate resistance is at 99.45. A break above it will be very bullish. Such a break can take the dollar index higher to 100.50-101 in the short term.

Failure to rise above 99.45 can drag the index down to 98.50-98 again. In that case, 97.50-99.50 can be the trading range for some time.

The price action around 99.45 will need a close watch this week.

Treasury Yield

The rise to 4.6 per cent on the US 10 Year Treasury Yield (4.6 per cent) has happened much quicker than expected. Immediate support is around 4.55 per cent. If the yield manages to sustain above this support and gets a good follow-through rise, the upmove can gain further strength. That will have the potential to take the 10 Year Yield higher to 5 per cent in the coming months.

A fall below 4.55 per cent is needed to pause the rise and drag the yield down to 4.45-4.4 per cent.

Published on May 16, 2026