Concerns about a potential US recession are affecting major indices on Wall Street, including the Nasdaq 100, S&P 500, and Dow Jones Industrial Average, which are approaching key support levels. They have experienced four weeks of losses, amid rising inflation forecasts, trade tensions, and declining consumer confidence.

The Nasdaq 100 has dropped over 11% from its peak, currently testing support at 19,437. If this level holds, possible rebounds may target between 19,932 and 21,050, while a failure could lead to a deeper correction towards 17,825 or lower.

The S&P 500 has also seen a downturn of over 7% from its February peak. Critical support at 5,542 needs to be maintained to avoid further declines, with worst-case scenarios suggesting a fall to approximately 4,564.

The Dow Jones is positioned above vital support at 41,330 but faces increased risk from a double-top pattern. Breaching this support could trigger a decline towards levels around 39,062 and potentially beyond.

Apple has fallen 16% from its high, with potential rebounds limited by broader market trends. Microsoft also sees challenges after a similar drop, with significant downside risks if market conditions worsen. Alphabet has declined 21%, facing further risks from regulatory pressures and declining ad revenue.

Several economic factors add to recession fears, such as trade tensions, a revised inflation forecast of 2.8% for 2025, and weakening consumer confidence. Additionally, leading economic indicators have shown significant declines, signalling recession risks, while high interest rates continue to stress consumers and businesses.

Caution is advised for investors, as buying dips may present short-term opportunities, but overall upside appears limited amid current economic uncertainties and market weakness. Diversification and prudent strategies are essential during this volatile period.

The major indices in the US are encountering key levels as concerns about a downturn continue to influence sentiment. Losses have accumulated over several weeks, driven by growing concerns about trade policies, a worsening inflation outlook, and a decline in consumer sentiment.

The Nasdaq 100’s retreat of over 11% has brought it to an important support level at 19,437. Should this threshold provide stability, a recovery attempt could take prices towards 19,932 or 21,050. However, if it breaks through, a further slide towards 17,825 becomes more likely, raising the prospect of extended losses.

Meanwhile, the S&P 500 is also under pressure, with a drop exceeding 7% since its high in February. Staying above the crucial 5,542 level will be necessary for avoiding deeper setbacks, which could potentially reach as low as 4,564 if downward momentum accelerates.

The Dow Jones remains above an important support area at 41,330 but is displaying concerning technical signals in the form of a double-top structure, which often precedes further weakness. A move below this boundary could send it towards 39,062, with the risk of a deeper retracement if sentiment worsens.

Individual stocks are also feeling the strain. Apple has stumbled 16% from its peak, with any potential rebound likely constrained by overall market conditions. Microsoft is tracking a similar path after suffering a comparable pullback, leaving further vulnerabilities if pressure persists. Alphabet’s losses are more pronounced, down 21%, and additional headwinds stem from regulatory scrutiny and softening advertising revenues.

Several economic developments are fuelling investor caution. Trade disputes remain unresolved while inflation projections have been revised upwards to 2.8% for 2025. At the same time, confidence among consumers continues to wane, which could dampen spending and economic expansion. Leading indicators have declined considerably, reinforcing concerns about economic contraction. The weight of elevated interest rates is also beginning to show, adding stress to both households and businesses.

Given this backdrop, careful consideration is needed before acting. While some may look for short-term buying opportunities, the broader environment suggests that expectations for strong upside should be tempered. Strategies built around reducing concentration risk and adapting to changing conditions will be vital in the coming weeks as markets remain unpredictable.