The U.S. stock market advanced last week as investors remain optimistic about the large U.S. stimulus package. The S&P 500 and the Nasdaq set record closing highs on Friday while the Dow Jones did earlier in the week.

The prospect that more government spending will drive higher growth keeps the market in a positive mood, but the business activity in the U.S. is still under pressure, and the labor market is far from full employment. Increasing vaccinations will help the economy to recover however the pandemic is still the main drag for an economic comeback.

Disappointing economic data, like weaker-than-expected jobless claims, continue to be dismissed, and technically looking, there is still no sign of the correction. Details of a possible $1.9 trillion package are still being worked out, and some rumors say that higher taxes could be introduced for stock investors.

“The biggest concern for stocks was higher taxes/regulation followed by inflation/higher rates, though the duration and severity of the pandemic remained a significant focus,” Evercore ISI’s Oscar Sloterbeck wrote about the firm’s survey of investors.

S&P 500 up 1.2% on a weekly basis

For the week, S&P 500 (SPX) booked a 1.2% increase and closed at 3,934 points.

Data source: tradingview.com

If the price jumps above 4,000 points, it would be a “buy “signal for the S&P 500, but if the price falls below 3,700 points, it would be a strong “sell” signal, and we have the open way to 3,500 points.

DJIA up  1% on a weekly basis

The Dow Jones Industrial Average (DJIA) rose 310.16 points, or 1%, to 31,458.40.

Data source: tradingview.com

Dow Jones continues to trade near record highs, and if the price jumps again above 31,500 points, the next target could be around 3,600 or even 3,700 points. On the other side, if the price falls below 30,000 points, it would be a firm “sell” signal, and the next target could be around 29,500 points.

Nasdaq Composite up 1.7% on a weekly basis

 The Nasdaq Composite (COMP) gained 1.7% on a weekly basis and closed at 14,091 points.

Data source: tradingview.com

Nasdaq Composite advanced above 14,000 points, and as long the price is above this trend line and 13,000 points, this index remains in a bull market. If the price jumps above 14,100 points, the next target could be around 14,200 or even 14,400 points.

Summary

Wall Street’s three main indexes advanced last week, but it is important to say that equities’ rally is directly linked to stimulus hopes instead of growth ones. Details of a possible $1.9 trillion package are still being worked out, and some rumors say that higher taxes could be introduced for stock investors. The week will start with a holiday in the U.S., and technically looking, there is still no sign of the stock market correction.

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