Dow briefly hits 40,000 before closing lower

Dow hits 40,000 for the first time before closing slightly lower; Tech and retail stocks drive gains

Dow briefly hits 40,000 before closing lower

The Dow Jones Industrial Average closed slightly lower on Thursday after briefly surpassing the 40,000 marks for the first time, as reported by CNBC.

At its highest point, the blue-chip index reached 40,051.05, marking a significant milestone in the bull market that began in October 2022. Earlier in the year, the Dow approached 40,000 but experienced a slight pullback in April due to concerns over high interest rates.

The rally resumed in May, driven by strong earnings and softer inflation readings.

The 30-stock Dow ended the day down 38.62 points, or 0.1 percent, closing at 39,869.38. The S&P 500 fell 0.21 percent, closing at 5,297.10, while the Nasdaq Composite dropped 0.26 percent, finishing at 16,698.32.

During the session, the broader market index also set a new record after closing above 5,300 for the first time ever on Wednesday, and the Nasdaq hit an all-time high. The Dow has gained nearly 6 percent in 2024, with the Nasdaq and S&P 500 both up 11 percent.

“This achievement is a testament to the powers of capital formation, innovation, profit growth, and economic resilience,” said John Lynch, chief investment officer at Comerica Wealth Management.

“The recent technical momentum and fundamental strengths, including earnings and interest rates, suggest further near-term gains.”

Walmart led the Dow's surge past 40,000, rising nearly 7 percent on strong fiscal first-quarter results. Walmart’s shares have increased by 21 percent in 2024.

The Dow's advance toward 40,000 has been fuelled by expectations of interest rate cuts and enthusiasm for artificial intelligence. The CME Group’s FedWatch Tool indicates that the first Federal Reserve rate cut is anticipated in September, following a smaller-than-expected rise in consumer prices for April.

Tech giants such as Amazon, Meta Platforms, and Nvidia have also seen significant gains this year. Amazon, which joined the Dow in the first quarter, is up more than 20 percent in 2024. Other top performers include American Express, up about 29 percent, and Goldman Sachs, up 20 percent.

These companies have risen as investors bet on economic resilience and strong consumer spending.

Baird analyst Ross Mayfield believes the rally has the strength to continue. “This has all the signs of a cyclical bull market and it’s not running out of steam as far as we can tell,” he said in an interview with CNBC.