Dow Jones, the S&P 500, and Nasdaq price forecast after weak U.S. job report

The Dow Jones, the S&P 500, and the Nasdaq weakened on a weekly basis as the prospect of renewed lockdowns and rising COVID-19 cases made investors nervous.

The U.S. reported an all-time high of more than one million new daily infections on Monday, leading to staffing issues across industries; investors have seen that the virus still has the ability to disrupt business.

Omicron could alter daily life for many Americans during the first month of 2022, and there are also fears that the rising number of cases could overwhelm hospitals.

The U.S. released the Nonfarm Payrolls report on Friday, which showed that the country added only 199K jobs in December. Thomas Simons and Aneta Markowska, economists at Jefferies, wrote:

December payrolls came in quite a bit weaker than consensus on the headline, and generally, this feels like a repeat of last month. Despite the strong demand for workers across all industries and friendly seasonals, the number was still pretty modest.

The job report missed economists’ estimate of 450K for December, while average hourly earnings increased by 0.6% for the same month and at a 5.8% annual rate over the past six months.

Overall, while this report is disappointing, it probably does not change the outlook for how aggressively the U.S. Federal Reserve would normalize monetary policy to fight inflation.

The positive news is that the unemployment rate fell to 3.9% from 4.2% in November, which pushed market bets higher that the Federal Reserve will raise interest rates in March.

S&P 500 down -1.87% on a weekly basis

For the week, S&P 500 (SPX ) weakened by -1.87% and closed at 4,677 points.

Data source: tradingview.com

The upside potential remains limited for the week ahead, and if the price falls below 4,500 points, it would be a strong “sell” signal.

DJIA down -0.29% on a weekly basis

The Dow Jones Industrial Average (DJIA) weakened -0.29% for the week and closed at 36,231 points.

Data source: tradingview.com

The strong support level stands at 35,000 points, and if the price falls below this level, the next target could be 34,500 points.

On the other side, 37,000 points represent the current resistance level, and if the price jumps above this level, the next target could be around 37,300 points.

Nasdaq Composite down -4.53% on a weekly basis

Nasdaq Composite (COMP) has lost -4.53% on a weekly basis and closed below 15,000 points.

Data source: tradingview.com

The current support level stands around 14,500 points, and if the price falls below this level, it would be a “sell” signal, and we have the open way to 14,000 points.

Summary

Wall Street’s three main indexes weakened on a weekly basis as the prospect of renewed lockdowns and rising COVID-19 cases made investors nervous. The U.S. released the Nonfarm Payrolls report on Friday, which showed that the country added only 199K jobs in December.

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