Dow breaches 40,000 mark as rate-cut hopes fuel fresh record high
The blue-chip index has recovered nearly 40% from its October 2022 lows, powered by strong quarterly results and rising bets of interest rate cuts by the Federal Reserve. At 11:28 a.m. ET, the Dow Jones Industrial Average was up 112.55 points, or 0.28%, at 40,020.55, the S&P 500 was up 13.11 points, or 0.25%, at 5,321.26, and the Nasdaq Composite was up 35.67 points, or 0.21%, at 16,778.06.
The Dow crossed the 40,000 level for the first time on Thursday, notching a fresh all-time high and leading gains a day after tepid bolstered hopes of .The blue-chip index has recovered nearly 40% from its October 2022 lows, powered by strong quarterly results and rising bets of interest rate cuts by the .
"The Dow is seen as 'Main Street America' and media across this country and global media reference the Dow," said Quincy Crosby, chief global strategist at LPL Financial.
"What (the 40,000 milestone) means is that regardless of the concerns about inflation and consumer sentiment, the companies in the Dow, which represent a cross-section of our economy, continue to march higher on better earnings and stronger guidance."
All three major indexes notched record closes in the previous session after a smaller-than-expected rise in consumer inflation fueled optimism that inflation was easing after three months of hotter numbers.
The market is back to betting on two from the Federal Reserve this year, with traders seeing a 70% chance of the first reduction in September, according to the CME FedWatch Tool.
On the economic front, data showed the number of Americans filing new claims for jobless benefits fell 10,000 to a seasonally adjusted 222,000 for the week ended May 11.
Inflation is still not where the Fed needs it to be, with companies in the service sector continuing to feel they have pricing power, Richmond Federal Reserve president Thomas Barkin said.
Among earnings updates, rose 5.8% after the retail giant raised its fiscal 2025 sales and profit forecast, betting on easing inflation to further boost demand for essentials.
That helped consumer staples lead sectoral advances with a 1.6% gain.
fell 3.2% after the farm equipment maker trimmed its annual profit forecast for the second time.
At 11:28 a.m. ET, the was up 112.55 points, or 0.28%, at 40,020.55, the S&P 500 was up 13.11 points, or 0.25%, at 5,321.26, and the Composite was up 35.67 points, or 0.21%, at 16,778.06.
Most megacap growth and technology stocks climbed, with Nvidia leading gains.
U.S.-listed shares of Chubb added 3.6% after Warren Buffett's revealed a stake worth $6.7 billion in the insurer.
Popular meme stocks and slid 23.1% and 13.5%, respectively.
They were set to extend Wednesday's losses that followed a two-day rally sparked by the return of "Roaring Kitty" Keith Gill, the central figure in the 2021 meme stock frenzy.
Declining issues outnumbered advancers for a 1.01-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and one new low, while the recorded 65 new highs and 34 new lows.
Source: Stocks-Markets-Economic Times
