Traders work on the floor at the New York Stock Exchange.
Brendan McDiarmid | Reuters
the Dow Jones Industrial Average I reached a milestone Thursday that seemed unfathomable a year ago.
The 30-stock index broke above 40,000 for the first time. The move comes as investors rejoice at the prospect of artificial intelligence boosting corporate profits and the Federal Reserve may cut interest rates later this year as inflation eases further from its highs during the pandemic.
The Dow has had a long and winding road to reach these levels. Here's a look at the Dow's path over the past 20,000 points.
The Dow Jones closed for the first time above the 20,000 mark in early 2017, as investors began to price in lower corporate taxes in the United States under former President Donald Trump. These predictions were fulfilled at the end of that year and also pushed the Dow Jones Index above 25,000 by January 2018.
However, the Dow struggled in 2018 after excitement over lower taxes faded, as trade tensions between China and the United States escalated and the Federal Reserve raised interest rates. The Dow Jones index ended the year down more than 5%.
In 2019, the stock market rebounded as the Federal Reserve shifted away from raising interest rates. By early 2020, the Dow Jones was approaching 30,000 – reaching a high of 29,551.42 on February 12, 2020.
Then came the COVID-19 pandemic. The Dow Jones fell 38% from its intraday peak in February 2020 to a low of 18,213.65 in March 2020.
Over the following months, the index will recover as progress in Covid vaccine development increases and the Fed and lawmakers take unprecedented measures to support the economy. By November 2020, the Dow closed above 30,000 for the first time.
The momentum from the Covid lows continued into 2021, with the Dow breaking above 35,000. However, the good times wouldn't last much longer, as a bear market took the Dow to a low of 28,660.51 before recovering. Since hitting that low, the Dow Jones has risen 40%.
— CNBC's Gabriel Curtis contributed reporting.
