The Dow Jones Industrial Index surpassed 40,000 for the first time Thursday, extending a stellar year of stock market gains fueled in part by good inflation data.
The Dow reached 40,000.54 before falling back, but it was the first time it had crossed that mark.
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“This achievement is a testament to the powers of capital formation, innovation, profit growth, and economic resilience,” Comerica Wealth Management’s chief investment officer, John Lynch, stated.
Walmart’s share prices increased by more than 6%, helping to boost the Dow.
Stocks rose on inflation data Wednesday, as the Labor Department revealed that the consumer price index inflation rate was a seasonally adjusted 0.3% in April, keeping the annual inflation rate at 3.4%.
Inflation was lower than projected by Dow experts, indicating that prices is returning to normal and the economy is doing well.
The S&P 500 reached 5,000 for the first time in February, following a fifth consecutive week of positive economic news. The fact that inflation was lower than projected contributed to the stock index’s success.
The performance of seven giant businesses known as the “Magnificent Seven”—Nvidia, Microsoft, Meta, Amazon, Apple, Alphabet, and Tesla—also contributed significantly to S&P gains.
The Dow, Nasdaq, and S&P have all shown solid year-over-year gains, with the Dow rising 6% in 2024. The S&P and Nasdaq have risen 11% this year.
As stock prices rise, inflation stabilizes.
President Joe Biden said in a statement on Wednesday that he understands that many families are still struggling and that while progress has been made on inflation, much more work needs to be done.
