Dow Jones soars past 40,000 for the first time ever
The Dow Jones Industrial Average achieved a historic milestone on Thursday as it crossed the 40,000 level for the first time. This record-breaking surge marked the third consecutive day of intraday highs. The rise was fueled by expectations of interest rate cuts in the US and strong corporate earnings. Despite recent rate hikes by the US Federal Reserve, robust economic growth has helped the blue-chip index bounce back from its October 2022 lows.
Other indices follow suit, reach record highs
Alongside the Dow Jones, the S&P 500 and NASDAQ also reached record highs in early New York trading on Thursday. However, both indices ended the session slightly lower. Data released on Wednesday showed a slowdown in consumer price inflation. This was offset by a decrease in US jobless claims for the latest week and a 0.9% increase in US import prices last month.
Investors anticipate interest rate cuts, boosting market confidence
Investors are predicting two quarter-point interest rate cuts from the Federal Reserve this year. According to the CME FedWatch Tool, there's a 70% chance of the first reduction happening in September. Krosby, chief global strategist at LPL Financial, told Reuters that despite concerns about inflation and consumer sentiment, companies in the Dow continue to perform well due to better earnings and stronger guidance.
Wall Street indices pare gains, individual stocks fluctuate
Despite the record-breaking surge, all three Wall Street indices pared gains on Thursday. The Dow Jones Industrial Average ended 38.62 points or 0.10% lower at 39,869.38. The S&P 500 fell by 11.05 points or 0.21% to close at 5,297.10 while the NASDAQ settled down by 44.07 points or 0.26% at 16,698.32. Among notable individual stocks, Walmart shares rallied by 7%, while Deere share price declined by 4.8%.
Unemployment claims fall, boosting Treasury yields and dollar
The number of Americans filing new claims for unemployment benefits fell last week. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 222,000 for the week ended May 11. This data boosted US Treasury yields and the dollar. However, New York Fed President John Williams stated that this data is not sufficient to call for the US central bank to cut interest rates anytime soon.
