The Dow Jones Industrial Average closed at a record high on Tuesday, rallying 743 points for its biggest one-day increase in over a year. The blue-chip index closed at 40,954.48, marking a 1.85 percent increase for the day. This surge comes after the index has seen consecutive daily gains since last Wednesday, resulting in a more than 4 percent increase over the last five trading days. Tuesday’s close represents the biggest one-day jump since June 2023.
The market rally was fueled by stronger-than-expected June retail sales data, healthy earnings reports, and expectations of a Federal Reserve benchmark interest rate cut in September. UnitedHealth, a major player in the health insurance industry, saw its stock rise by 6.5 percent after reporting better-than-expected second-quarter earnings. This boost in UnitedHealth’s stock price significantly contributed to the Dow’s rise, as the insurer holds the highest weight in the index.
The Dow consists of 30 large, well-established companies traded on U.S. stock exchanges, including industry giants like Apple, Boeing, Nike, and Walmart. It serves as a key indicator of the overall performance of the stock market.
In addition to the Dow’s record-breaking performance, the S&P 500 also soared to its 38th record close of the year with a gain of 35.98 points, while the Nasdaq composite index experienced a more moderate increase of 36.77 points.
Small-cap stocks in the Russell 2000 index were among the biggest winners last week, rising by 3.5 percent on Tuesday. This index has outperformed the Nasdaq and is on its most significant five-day run since April 2020. The market strength in small-cap stocks suggests that the positive momentum could extend beyond technology stocks, especially as investors anticipate the Fed rate cut this fall, which will lower borrowing costs for smaller firms.
The recent market rally follows a milder-than-expected inflation report last week. Fed Chair Jerome H. Powell’s remarks on inflation moving closer to the central bank’s 2 percent target also boosted investor confidence. Furthermore, Bank of America and Morgan Stanley both reported better-than-expected results on Tuesday, contributing to the overall positive sentiment in the market.
