Wall Street's bullish mood extended last week, propelling the Dow Jones Industrial Average within striking distance of its all-time high, buoyed by easing trade tensions and upbeat expectations ahead of tech earnings. The index closed just 0.25% shy of its peak, with the S&P 500 and Nasdaq notching new records.
Renewed optimism over a potential US–EU tariff truce helped lift risk appetite, while traders also pinned hopes on solid results from Big Tech—namely Microsoft, Meta, Amazon, and Apple—which remain at the heart of the market's narrow rally leadership.
Meanwhile, the Federal Reserve held interest rates steady at 4.25–4.5%, striking a cautious tone amid conflicting signals. While second-quarter GDP was surprised by the upside at +3%, July's job additions sharply missed forecasts at just 73,000, complicating the case for near-term rate cuts.
On the technical front, the Dow trades in a tight band between 44,800 and 44,900, probing overhead resistance just beneath the psychological 45,000 mark. Support lies around 44,600–44,650, with firmer footing near 44,300. Momentum appears stretched, underscoring the importance of a decisive breakout—or risk of a pullback—amid concentrated leadership.
What to watch: A sustained break above 45,000 could trigger fresh upside, while a slip below 44,600 may signal the start of a broader correction. Market direction will hinge on upcoming Fed signals and key earnings surprises from tech heavyweights.
1. Trade optimism & earnings focus
Indices rallied last week on bullish momentum—S&P 500 and Nasdaq reached record highs while the Dow closed just 0.25% shy, driven by improving macro sentiment and optimism around US–EU trade progress and tariff truce stories. Mega‑cap earnings from Microsoft, Meta, Amazon, and Apple remain center stage.
2. Fed caution & labour-market surprises
The Fed held rates at 4.25–4.5%, signaling a wait-and-see approach. Strong Q2 GDP (+3%) and mixed labor data—including a weaker-than-forecast July jobs report with just 73K additions—have tempered rate-cut expectations.
3. Technical structure & key levels
US30 trades near 44,800–44,900, testing resistance below its all-time high (~45,000). Support sits around 44,600–44,650, with more structural backing near 44,300. Momentum looks stretched given recent gains and narrow leadership concentration in mega-cap tech.
Summary
The Dow remains near all-time highs, supported by trade optimism and mega‑cap strength. Watch for a breakout above 45,000 to unlock further gains; weakness below 44,600 could trigger a pullback to 44,300. Key risk factors include upcoming Fed commentary and earnings surprises.
US30 H3 Timeframe
On this US30 3-hour chart:
Price was trending higher, forming a series of higher lows supported by a rising trendline.
However, after reaching the upper resistance zone (marked by the top black rectangle), price failed to create new highs and began consolidating.
The market then broke the ascending trendline with strong bearish momentum, followed by a sharp breakdown, confirming a bearish reversal.
That drop created a significant bearish impulse move, which is indicated by the long arrow pointing to the downside.
After the drop, the price pulled back but is now struggling to climb back above the broken support zone, which is now acting as resistance (near 44800–44900).
This is a classic case of a "break and retest" scenario, where former support becomes resistance.
The second black arrow points to a potential continuation of the bearish move, with price expected to fall toward the lower demand zone around 43000–42900, marked by the lower black rectangle.
My Trading Plan:
If price fails to reclaim the 44800–44900 resistance zone and shows bearish rejection (like a shooting star or bearish engulfing candle), I'll look to enter a sell trade.
My stop loss would be just above the resistance zone, and my first target would be around the 43000 support zone.
If that level breaks, we could see even deeper declines.
Direction- Bearish
Target- 43231.96
Invalidation- 45223.28
CONCLUSION
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