the Dow Jones Industrial Average The US stock index closed slightly lower on Thursday after briefly jumping above 40,000 points for the first time, supported by bets that inflationary pressures will ease and interest rates will fall.
At its highest level during the day, the average reached 40,051.05, the culmination of a bull market that began in October 2022. The index had approached the 40,000 mark earlier this year, before a slight decline in April due to concerns about rising prices. Interest rates are falling again. . The rally was revived in May on the back of strong earnings and some weak inflation readings.
In the end, the 30-stock Dow Jones index ended the day down 38.62 points, or 0.1%, to close at 39,869.38. The S&P 500 fell 0.21%, closing at 5,297.10. The Nasdaq Composite Index ended the day down 0.26%, closing at 16,698.32.
Dow year to date
During the session, the broader market index rose to a new record high after closing above the 5,300 level for the first time ever on Wednesday, while the tech-heavy Nasdaq also reached an all-time high. The Dow Jones is up nearly 6% in 2024, while the Nasdaq and S&P 500 are up 11% each.
“This achievement is a testament to the strength of capital formation, innovation, earnings growth and economic resilience,” said John Lynch, chief investment officer at Comerica Wealth Management. “Recent technical momentum and fundamental strengths, including earnings and interest rates, point to further gains in the near term.”
He was Walmart That sent the Dow Jones above 40,000 as the world's largest retailer rose nearly 7% on strong first-quarter financial results. Walmart is now up 21% in 2024.
The Dow's march toward 40,000 comes as expectations of interest rate cuts and enthusiasm around artificial intelligence boost investor sentiment. The Federal Reserve's first interest rate cut is scheduled for September, according to CME Group's FedWatch tool. This expectation grew after a smaller-than-expected increase in consumer prices for April was announced earlier this week.
Moreover, technology related things like Amazon, Meta platforms And Nvidia All are up sharply year to date.
Amazon, which just joined the more than century-old Dow Jones in the first quarter, is up more than 22% for the year. It is among the best performing companies in the Dow Jones Index this year American Express And Goldman Sachs. Both stocks rose more than 20% as investors bet that the economy would avoid a recession and consumers would remain strong.
Ross Mayfield, an analyst at Baird, believes this rally still has the strength to continue.
“This has every sign of a cyclical bull market, and it's not running out of steam as far as we can tell,” he told CNBC in an interview.
