The Dow Jones Industrial Average reached a new high of 40,000 this afternoon, marking a significant achievement for the index that monitors 30 leading American companies.
This surge represents the quickest 10,000-point increase for the blue-chip index, fueled by robust quarterly earnings and increased expectations of rate cuts by the Federal Reserve.
Having eclipsed its prior peak of 39,935.04 set on Wednesday, the index has now rebounded almost 40% from its low in October 2022.
Market sentiment has shifted again towards anticipating two quarter-point reductions in interest rates by the US Federal Reserve this year, with traders assigning a 72.6% probability to the first cut happening in September, as indicated by the CME FedWatch Tool.
Optimism among investors has also risen following indications that China is considering initiatives that could help alleviate its property crisis.
The other two major American indices also saw gains today. Both the S&P 500 and the Nasdaq Composite Index, which has a strong emphasis on technology companies, are up by approximately 0.2%.
Yesterday, all three major American indices achieved record closes following a smaller-than-expected increase in consumer inflation, sparking optimism that inflation pressures might be subsiding after three months of higher figures.
Peter Cardillo, chief market economist at Spartan Capital Securities, commented, “At these levels, the market needs to take a breather and rest. It’s very possible that we may not see it today, but we are nearing a phase of consolidation, likely with a slight pullback and some sideways movement.”
