The stock market experienced a downturn as the Dow, Nasdaq, and S&P 500 futures all fell after encountering resistance at their upper-channel pivots on Thursday. The continued selloff by mid-Friday marked a lack of bullish momentum, with the potential for more declines if key support levels are breached.
In the Dow futures market, a rising-wedge breakdown accelerated, with bears pushing prices lower for a fourth session. Key support levels include 43,664 and 43,333, with potential targets at 42,797. A bullish recovery could happen if levels near 43,900 are reclaimed.
Nasdaq 100 Futures Slide
The Nasdaq-100 futures saw a two-day slide from its high at 23,760.75. Key support levels include 22,794.50, with lower targets at 22,283 and below if bearish sentiment prevails. A recovery may occur if prices hold above 22,794.50.
S&P 500 futures faltered at 6,459, with the breakdown leaving critical support at 6,230.75. Targets for bears include 6,192.25 and lower, while a bullish recovery could occur if levels near 6,279.50 are regained. Traders must monitor these support levels closely, as they will determine potential further declines or relief rallies.
The recent market pullback gives us a clear signal to be cautious. The Dow, Nasdaq, and S&P 500 are all showing weakness after failing to break higher, suggesting bears are in control for now. This aligns with the latest July 2025 Consumer Price Index report, which came in slightly hotter than expected at 3.4%, fueling concerns that interest rates may remain elevated.
For the Dow, we are watching the rising-wedge breakdown and considering bearish positions, like buying put options or selling futures. If the key support at 43,333 breaks, our next target would be the 42,797 level. We would only reconsider a bullish stance if prices manage to firmly reclaim 43,900.
Bigger Picture Volatility
The Nasdaq-100’s slide is particularly concerning, and we should prepare for more downside. A break below the critical 22,794.50 support level could open the door for a drop towards 22,283. Given that July’s Non-Farm Payrolls report also showed weaker-than-expected job creation at 160,000, tech and growth stocks may be especially vulnerable.
On the S&P 500, the failure at the 6,459 level is a significant bearish signal for the broader market. Our focus is on the 6,230.75 support; a breach here would likely see us target 6,192.25 with our short positions. We will use tight stop-losses on any bullish trades unless the market can rally back above 6,279.50.
Looking at the bigger picture, this kind of volatility isn’t unusual for this time of year. Historically, August and September can be choppy months for the market, as we saw with similar pullbacks during the late summers of 2023 and 2024. This seasonal pattern reinforces our defensive strategy, making us favor trades that profit from falling prices or increased volatility.
