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

Wall Street’s three main indexes advanced on Friday as the U.S. job market surprised so much to the upside, and investors ignored geopolitical turmoil and Federal Reserve tightening concerns.

The U.S. released the Nonfarm Payrolls report on Friday, which showed that the country added 467K jobs in January. The job report surpassed economists’ estimate of 150K for January and shrugged off concerns about the impact of the COVID-19 omicron variant on the labor market.

The unemployment rate ticked higher to 4% from 3.9% in December, while the participation rate jumped to 62.2%, signaling quite a healthy recovery in the sector. Jefferies economists Thomas Simons and Aneta Markowska added:

We had expected that omicron-related callouts and business closures, especially in the leisure and hospitality sector, would generate a contraction in payrolls. Instead, we saw leisure and hospitality jobs lead to an increase in employment.

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

The U.S. Federal Reserve is likely to meet market expectations for a 25-basis-point rate hike in March, while Fed Chairman Jerome Powell said that there is more room for further policy tightening without hurting employment.

Strong corporate earnings also influenced the market positively, and results from many big companies provided a strong start to the first quarter of 2022 year. Investors’ focus will remain on the quarterly earnings reports because many companies have yet to publish their reports.

Next week, Amgen, Peloton, Pfizer, Twilio, Uber, Walt Disney, Coca-Cola, Pepsi, Philip Morris, and Twitter are among the companies scheduled to report quarterly results.

S&P 500 up 1.55% on a weekly basis

For the week, S&P 500 (SPX) booked a 1.55% increase which marked the S&P 500’s second positive week in a row.

Data source: tradingview.com

Despite this, S&P 500 is still in the red for 2022 after posting declines in the first three weeks of the year. 4,300 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 up  1.05% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 1.05% for the week and closed at 35,089 points.

Data source: tradingview.com

The Dow Jones Industrial Average is still trading below its recent highs, and the strong resistance level stands at 36,000 points.

The strong support level stands at 34,000 points, and if the price falls below this level, it would be a strong “sell” signal.

Nasdaq Composite up 2.38% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 2.38% increase and closed at 14,098 points.

Data source: tradingview.com

Even with last week’s gains, Nasdaq has plunged by more than 10% so far this year, and if the price falls again below 13,500 points, it would be a strong “sell” signal.

Summary

Wall Street’s three main indexes advanced on Friday as the U.S. job market surprised so much to the upside, and investors ignored geopolitical turmoil and Federal Reserve tightening concerns. The U.S. added 467K jobs in January while the unemployment rate ticked higher to 4% from 3.9% in December.

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