The Dow Jones Industrial Average hit a new milestone Friday, closing above 40,000 for the first time and underscoring the stock market’s resilience despite volatile inflation and uncertainty surrounding the prospect of Federal Reserve interest rate cuts.
“The significance is psychological,” says Jason Ware, chief investment officer of Albion Financial Group. For investors, “it makes us feel like we’re” doing the right thing.
And for those not in the market, it’s a clarion call. “Make sure you’re invested in the market so you’re benefitting from the compounding effects over time,” he says. “You better be in the room.”
The Dow closed up 134 points, or 0.34%, to end the day at 40,003.59. The S&P 500 gained 0.12% while the Nasdaq Composite slipped 0.074%.
How is the Dow doing today?
The Dow’s latest spike was prompted by Wednesday’s inflation report, which showed inflation cooling for the first time in months. Investors have taken that report as affirmation that the Fed could move forward with interest rate cuts as soon as September.
Data showing softening retail sales and a stronger-than-expected first-quarter earnings reporting period have also bolstered investors’ confidence, according to Sam Stovall, chief investment strategist at investment research and analytics firm CFRA Research.
Why is the Dow up?
The Dow has gained more than 6% this year. Stocks had taken a tumble in April as investors grew concerned about the Fed pushing back interest rate cuts to deal with…
