S&P 500, Nasdaq, Dow Forecast: Bulls Face Their Biggest Test of the Summer

Equity Indices Technical Forecast: Weekly Trade Levels

U.S. equities closed broadly lower this week, with the Nasdaq falling 1.8%, the S&P 500 down 0.66%, and the Dow slipping 0.38%.
The S&P 500 is testing a pivotal technical support zone with a multi-week consolidation pattern preserved just above- breakout in focus
Nasdaq momentum has deteriorated sharply as the index threatens a breakdown from key trend support.
Dow lower for a third week after turning from major resistance- broader uptrend remains intact with initial support in view
Major event risk next week with FOMC rate decision and PCE inflation data on tap.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of these equity indices and more. Join the session or stream live on YouTube on Monday’s at 8:30am EST.

S&P 500 Price Chart – SPX500 Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; S&P 500 on TradingView

Technical Outlook: The SPX500 has been straddling the upper parallel of a multi-year uptrend for nearly three-months with the index trading within the confines of a massive consolidation pattern just below the record high. The focus is on a breakout of this contractionary range for guidance with weekly momentum divergence suggesting the broader rally may be vulnerable to a larger pullback within the broader uptrend.

S&P 500 Price Chart – SPX500 Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; S&P 500 on TradingView

A closer look at the S&P 500 daily chart shows the index continuing to trade within the confines of an ascending pitchfork we have been tracking off the yearly (April) low. Note that the median now converges on confluent support at the 61.8% retracement of the June rally and the June low-day close (LDC) at 7361/91. The lower bounds of the multi-month consolidation pattern (red) also converges on this zone and a break / daily close below would suggest a more significant correction is underway. Subsequent support objectives rests with the June low at 7224 and the 38.2% retracement of the yearly range at 7120. Key support and broader bullish invalidation rests more than 9% off the highs at 6922/80- a region defined by the October high, the 2025 high-day close (HDC), and the 1.618% extension of the 2025 opening range. The lower parallel converges on this zone into mid-August.

Monthly open resistance stands at 7483 and is backed by the record weekly high-close at 7578. A breach / weekly close above this threshold is needed to validate a breakout June consolidation range and mark resumption of the broader uptrend. Subsequent resistance objectives eyed at the 61.8% extension of the 2025 rally at 7678 and the 1.618% extension of the broader 2020 advance at 8755.

Bottom line: The S&P 500 testing pivotal technical support at the lower bounds of a multi-month consolidation pattern. The focus is on a breakout of the 7361-7578 range for guidance in the weeks ahead. From a trading standpoint, losses would need to be limited to the median-line IF price is heading higher on this stretch with a breach of the monthly high needed to fuel the next major leg of the advance.

Keep in mind that while AI remains the market's primary leadership group, one of the more constructive developments has been the gradual expansion of participation into other sectors. Financials, energy, healthcare and selected industrials have begun absorbing some of the leadership burden as several mega-cap technology stocks consolidate. Although breadth indicators remain mixed, continued rotation beyond AI would provide a healthier foundation for the broader bull market.

Markets will turn their attention to Wednesday's FOMC decision and Thursday's Core PCE inflation report, the Fed's preferred gauge of underlying inflation. Although policymakers are widely expected to keep rates unchanged, the combination of the policy statement and inflation data will be critical in shaping expectations for the remainder of the year. Evidence of persistent inflation would likely reinforce expectations for additional Fed tightening, raising discount rates and creating a less favorable backdrop for equities. Fed funds futures currently price a 64% probability of no change next week, while implying an 80% chance of a 25-basis-point rate hike in September. Stay nimble into the release and watch the weekly close on Friday for guidance.

Nasdaq Price Chart – NDX Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; NDX on TradingView

Technical Outlook: Nasdaq was the worst performer last week with the index falling 1.8% to close just below a key support zone at 28,197/219. This level is defined by the 1.618% extension of the 2026 opening range & the June swing low and converges on the median line of the 2025 pitchfork. Weekly & daily momentum have now fallen to the lowest levels since the April breakout, and the momentum profile favors the bears while below this slope.

Weekly support now rests with the 50% retracement of the yearly range, which converges on the 25% parallel over the next few weeks at 26,801. Subsequent support objectives rests at the 2025 swing high at 26,182 and the yearly open at 25,524.

Look for initial resistance at the record high-week close (HWC) at 28,930 and is backed by the record high-close (HC) at 30,406. Note that the 75% parallel converges on this level mid-August and a breach / weekly close above is needed to mark resumption of the broader uptrend towards the 100% of the 2025 advance at 32,481.

Bottom line: Nasdaq is tempting a break below confluent support and IF this breakdown is legit, the threat for further losses remains into the close of the month. From a trading standpoint, the risk is titled to the downside while below 28,930- look for a larger reaction on stretch towards 26,800 IF reached with a close above 30,406 needed to fuel the next major leg of the rally.

Dow Jones Price Chart – DJI Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DJI on TradingView

Technical Outlook: The Dow exhausted into confluent resistance into the open of the month at the 3.618% extension of the 2025 advance near 52,952. Note that the upper parallel of the 2022 pitchfork converged on this level with the index marking a third consecutive weekly decline off uptrend resistance.

Initial support rests with a basic 23.6% retracement of the yearly range at 51,352 and is backed by key support at 50,272/150. This region is defined by the 38.2% retracement, the 1.618% extension of the 2025 opening range, and the February highs. Note that the 75% parallel converges on this level and losses below this slope would be needed to suggest a more significant high is in place and a larger correction is underway. Key support and broader bullish invalidation rests with the January low, the 61.8% retracement and the 52-week moving average at 47,853-48,250.

A topside breach / weekly close above 52,952 is needed fuel the next leg of the advance towards subsequent resistance at the 61.8% extension of the 2025 advance at 53654 and the 1.618% extension of the 2026 opening range at 53,881. Note that the upper parallel converges on this zone into the close of the August- look for a larger reaction there IF reached.

Bottom line: The Dow turned from confluent uptrend resistance into the start of the with the subsequent reversal now approaching initial support. From a trading standpoint, losses would need to be limited to 50,150 IF price is heading higher on this stretch with a close above 52,952 needed to fuel the next leg of the rally.

Key US Economic Data Releases

Active Weekly Technical Charts

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.