Wall Street’s main indexes ended sharply higher on Friday, and the market rebounded the second day in a row from the sharp sell-off leading up to Russia’s invasion of Ukraine. Despite this, the risk of another decline still persists, especially if the situation worsens, and investors will continue to watch this situation very carefully.
The U.S. announced new sanctions on Russian banks and elites while hopes began to emerge that Russian President Putin might still be open to negotiations.
NATO Secretary-General Jens Stoltenberg said on Friday the alliance would continue to send weapons to Ukraine, and the volatility of stock markets should remain high in the coming days as events in Ukraine dictate market moves.
The focus of investors will also be on the Federal Reserve and the outlook for interest rates. The U.S. central bank is likely to meet market expectations for a 25-basis-point rate hike in March despite the Ukraine crisis.
Federal Reserve Governor Christopher Waller said last week that a 50-basis point rate increase at the March 15-16 Federal Open Market Committee meeting would show the FOMC’s commitment to fighting inflation.
Federal Reserve Governor Christopher Waller also said that he would like to see 100-basis points of policy tightening by mid-year, which could be achieved by raising rates by 25 basis points at each of the next four meetings. Stifel’s chief economist Lindsey Piegza added:
If the Fed raises rates too fast, consumers would “still be facing rising costs as the balance has yet to be restored to the global exchange of goods and services, but at the same time contend with the effects of a slower economy.
The upcoming week will be busy; Viatris, Lucid Group, Zoom Video, Salesforce.com, Snowflake, ChargePoint, and Broadcom are among the companies scheduled to report quarterly results
The U.S. will also publish the monthly job report, and investors will continue to pay attention to the Federal Reserve commentaries looking for any clues.
S&P 500 up 0.82% on a weekly basis
For the week, S&P 500 (SPX) booked a 0.82% increase which marked the S&P 500’s first weekly gain since the week ended February 04.
Data source: tradingview.com
The risk of another decline still persists, but if the price jumps above 4,500 points, it could reach 4,600 points very soon.
4,200 points represent the strong support level, and if the price falls below it, it would be a “sell” signal, and we have the open way to 4,000 points.
DJIA down -0.06% on a weekly basis
The Dow Jones Industrial Average (DJIA) weakened -0.06% for the week and closed at 34,058 points.
Data source: tradingview.com
The current support level stands at 33,500 points, and if the price falls below this level, the next target could be 33,000 points.
Nasdaq Composite up 1.08% on a weekly basis
For the week, the Nasdaq Composite (COMP) booked a 1.08% increase and closed at 13,694 points.
Data source: tradingview.com
Even with last week’s gains, the Nasdaq Composite has plunged by more than 13% so far this year, and if the price falls again below 13,000 points, it would be a strong “sell” signal.
Summary
Wall Street’s three main indexes ended sharply higher on Friday, but the risk of another decline still persists. Federal Reserve Governor Christopher Waller said that he would like to see 100-basis points of policy tightening by mid-year, which could be achieved by raising rates by 25 basis points at each of the next four meetings.
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