On Thursday, history was made as the Dow Jones Industrial Average surged past the remarkable milestone of 40,000.
The index that monitors the 30 most valuable publicly traded companies in the U.S. has reached a significant and symbolic milestone.
The Dow has registered a gain of approximately 6% since the beginning of the year.
The Dow closed below 40,000 at the end of Thursday’s trading session, with a slight decline for the day. The index finished at 39,869.38.
The Dow, S&P 500, and Nasdaq have experienced a recent surge, driven by data indicating a decrease in inflation. This positive development paves the way for the Federal Reserve to initiate the much-anticipated interest rate cuts.
Inflation data for this week indicated a slight easing in price increases compared to the previous month, putting a halt to the continuous surge in inflation since the start of 2024.
In recent months, the Federal Reserve had almost given up on its previous projection of three quarter-point rate cuts for this year. However, the deceleration of price increases has provided optimism for reviving those plans.
“The prospect of the Fed potentially reducing interest rates due to a slowdown in inflation, coupled with a strong and resilient economy, creates an ideal scenario for a bullish market,” remarked Ed Yardeni, the president of Yardeni Research and former chief investment strategist at Deutsche Bank’s U.S. equities division, in an interview with ABC News.
Yardeni added that it is more enjoyable to mention that the market is reaching nice, round numbers in record-high territory rather than going back down to them.
On Wednesday, the announcement of inflation news caused a surge in each of the major stock indexes, pushing them all to reach new record highs with gains of more than 5%. The positive momentum continued into early trading on Thursday, as the Dow edged up by a modest quarter of a percentage point.
Experts believe that the surge in the stock market this year can be partly attributed to the increased value of prominent technology companies. This growth is primarily fueled by the excitement surrounding the advancements in artificial intelligence.
