Dow Jones Industrial Average hits 40,000 for the 1st time
Written by ABC Audio All Rights Reserved on May 16, 2024
(NEW YORK) — The Dow Jones Industrial Average crossed 40,000 for the first time in history on Thursday.
This is a significant and symbolic milestone for the index that tracks 30 of the most valuable publicly traded companies in the U.S.
The Dow is now up about 6% so far this year.
The recent rally in the Dow, S&P 500 and Nasdaq has been fueled by data showing inflation is cooling, which would allow the Federal Reserve to begin its long-awaited interest rate cuts.
Inflation data released on Wednesday showed that price increases slowed slightly from the annual rate recorded in the previous month, ending a surge of inflation that stretches back to the beginning of 2024.
In recent months, the Fed had all but abandoned its previous forecast of three quarter-point rate cuts this year. But the slowdown of price hikes offered hope of rekindling those plans.
“The combination of the Fed likely to be lowering interest rates because inflation is moderating with a resilient economy is a beautiful scenario for a bull market,” Ed Yardeni, the president of market advisory firm Yardeni Research and former chief investment strategist at Deutsche Bank’s U.S. equities division, told ABC News.
“It’s more enjoyable to say the market is going to these nice, round numbers in record-high territory than coming back down to them,” Yardeni added.
The inflation news on Wednesday sent each of the major stock indexes up more than 5% for the day, propelling all of them to record highs. In early trading on Thursday, the Dow had ticked up a quarter of a percentage point.
Observers have also attributed this year’s stock market rally to the rise in value of some major tech firms, driven largely by enthusiasm about artificial intelligence.
Copyright © 2024, ABC Audio. All rights reserved.
KVSP