Dow Jones index crashes through 21,000 with new record after Donald Trump’s Congressional Address
It was just over one month ago that the index surpassed the 20,000 mark for the first time in its history
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Your support makes all the difference.The Dow Jones Industrial Average stock index broke through the 21,000 mark for the first time ever on Wednesday after Donald Trump adopted a more moderate tone in his first address to a joint session of Congress, reassuring some investors who had been disconcerted by his aggressive tone and divisive policies.
The benchmark US index was up more than 1.5 per cent on the day in afternoon trading in late trading in London, at around 21,100 points. It was just over one month ago that the index surpassed the 20,000 mark for the first time in its history.
Neil Wilson, a market analyst at ETX Capital, said that this is the fastest time ever that the index has passed a 1,000-point milestone.
“Trump’s rallying call to reignite the American spirit has produced the desired effect on the markets, pushing stocks to fresh all-time highs,” he said.
“The prospect of stronger growth, lower taxes, more spending and higher earnings is like a magic cocktail for equities."
The index has been on a tear ever since Mr Trump’s November election victory.
Bank stocks have enjoyed particularly dramatic gains, but other sectors have rallied hard too, spurred by hopes of major tax cuts, regulatory roll-backs and bumper infrastructure spending.
Some strategists said that stocks on Wednesday were also being driven by expectations that the US Federal Reserve is preparing to raise interest rates later this month.
On Tuesday, New York Fed President William Dudley said the case for tightening monetary policy had become "a lot more compelling", according to Reuters.
“Policymakers have been falling over themselves in the rush to suggest the US economy is ready for another hike, just one quarter after the last one,” said Chris Beauchamp, analyst at IG.
“Compared to the languid pace of tightening over the past year or more, this is a positively giddy pace,” he added.
In Europe, most major indices were higher too. London’s FTSE 100 ended the session up 1.6 per cent. The dollar was on track for its biggest one-day gain since 15 December and assets considered safest during times of market uncertainty, like gold, fell.
But some in the market still warned not to read too much into Mr Trump’s speech and to remain cautious of abrupt policy announcements and fresh uncertainty that could rock markets.
Schroders' chief economist Keith Wade said that Mr Trump’s speech was "strong on rhetoric but short on detail.”
He said that he remains “wary of the inflationary implications of the president’s policies.”
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