Dow Jones, the S&P 500, and Nasdaq price forecast after higher-than-expected June inflation figures

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Wall Street’s three main indexes weakened last week amid higher-than-expected June inflation figures and a disappointing initial round of the second quarter earnings reports.

The June Consumer Price Index jumped by 9.1% YoY, which spurred speculation that the Fed could hike rates by 100 bps at its next meeting.

The U.S. Producer Price Index jumped by 11.3% YoY in June, also higher than anticipated, and because of this, the Federal Reserve needs to be more aggressive in raising interest rates to combat inflation.

Federal Reserve Chair Jerome Powell said that inflation data has become more worrisome, but Federal Reserve Governor Christopher Waller cooled down the possibility of rising rates by 100 bps.

Federal Reserve Governor Christopher Waller also added that markets may have gotten ahead of themselves by pricing a 100 basis points rate hike in July.

The first round of earnings reports for the second quarter added to investors’ concerns about the economy, which will continue to face near-term headwinds.

JPMorgan Chase and Morgan Stanley posted a decline in second-quarter earnings that missed analysts’ estimates, but next week, the Q2 earnings reporting season will kick into a higher gear.

Johnson & Johnson, Netflix, CSX Corp, United Airlines Holdings, AT&T, Verizon Communications, Twitter, American Express, Bank of America, Goldman Sachs Group, Hasbro, and Halliburton are among the companies scheduled to report quarterly results.

Investors will watch guidance carefully from these companies to determine if inflation will crimp profit margins or if costs can be passed through.

They will also pay close attention to the companies’ outlooks and how U.S. companies coped with staffing and supply-chain issues last quarter.

S&P 500 down -0.93% on a weekly basis

For the week, S&P 500 (SPX ) weakened by -0.93% and closed at 3,863 points.

Data source: tradingview.com

The upside potential remains limited for the week ahead, and if the price falls below 3,800 points, it would be a strong “sell” signal.

DJIA down -0.16% on a weekly basis

The Dow Jones Industrial Average (DJIA) weakened -by 0.16% for the week and closed at 31,288 points.

Data source: tradingview.com

The current support stands at 31,000 points, and if the price falls below this level, it would be a “sell” signal, and we have the open way to 30,500 points. The upside potential still remains limited, but if the price jumps above 32,000 points, the next target could be 32,200 points.

Nasdaq Composite down -1.57% on a weekly basis

Nasdaq Composite (COMP) has lost -1.57% on a weekly basis and closed at 11,452 points.

Data source: tradingview.com

The strong support level stands at 11,000 points, and if the price falls below this level, the next target could be 10,500 points. The first resistance level stands at 12,000 points, and if the price jumps above this level, we have the open way to 12,500 points.

Summary

Wall Street’s three main indexes weakened on a weekly basis as investors traded cautiously after the U.S. reported higher-than-expected June inflation figures. The June Consumer Price Index jumped by 9.1% YoY, which spurred speculation that the Fed could hike rates by 100 bps at its meeting this month.

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