Dow Jones closes above 40,000 for first time in history amid hopes of Federal Reserve rate cut
Companies across different sectors helped fuel highest closing in the 139-year-old index’s history
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Your support makes all the difference.The Dow Jones Industrial Average on Friday closed above 40,000 for the first time in the 139-year-old index’s history.
Goldman Sachs, UnitedHealth, Microsoft, and Caterpillar were the top contributors to the historic first, according to The Wall Street Journal.
The Dow is a measure of 30 top US-based companies and is considered a key benchmark for the overall state of the US and global economy.
The record-setting closing comes as firms expect the Federal Reserve to cut interest rates at some point this year, as inflation edges down towards the central bank’s 2 per cent target.
“That’s a fairly optimistic setup for at least the near future here in 2024,” Tom Hainlin, senior investment strategist at U.S. Bank Asset Management, told CNBC.
The Dow reached 40,000 for a period on Thursday as well but closed below the historic benchmark.
All three major US stock indexes closed the week with gains, according to MarketWatch, with the Dow rising 1.2 per cent, the S&P 500 climbing 1.5 per cent, and the Nasdaq increasing by 2.1 per cent.
Earlier this week, the Bureau of Labor Statistics reported that between March and April, the consumer price index and core inflation both rose by 0.3 per cent. The core inflation reading was the lowest it has been since April of 2021.
Not everyone is feeling the optimism though.
JPMorgan CEO Jamie Dimon warned at the firm’s Global Markets Conference on Thursday that the green-energy transition, infrastructure spending, remilitarization across the globe, trade restrictions and other factors could perpetuate inflation for longer than some believe.
“I think the underlying inflation may not go away the way people expect it to,” he said, adding, “I think there are a lot of inflationary forces in front of us that may keep it a little bit higher than people expect.”
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