Wall Street reached a significant milestone on Thursday as the Dow Jones Industrial Average crossed the 40,000-point mark for the first time ever. This achievement was fueled by a post-earnings surge in retail giant Walmart and strength in chip stocks, which boosted equities across the board.
The markets were already riding high from a record-breaking session the day before, with all three major indexes hitting closing highs after positive economic data on inflation raised expectations for Federal Reserve interest rate cuts. The S&P 500 also broke through the 5,300-point barrier for the first time.
In mid-day trade, the tech-heavy Nasdaq Composite was up 0.08% to 16,756.12 points, while the S&P 500 was higher by 0.12% to 5,314.68 points. The Dow Jones Industrial Average had gained 0.18% to 39,979.19 points, reaching a session high of 40,051.05 points, a level not seen in nearly three and a half years.
U.S. President Joe Biden and Vice President Kamala Harris released a statement celebrating the milestone, attributing it to Biden’s efforts to strengthen the economy and secure the retirement of millions of Americans.
The latest consumer price index (CPI) report, which showed cooling inflation, coupled with flat retail sales and declining manufacturing activity, led market participants to increase their expectations for interest rate cuts. This combination of factors is seen as favorable by the Federal Reserve, which is looking for signs of slowing inflation and economic deceleration to support a shift in policy.
Walmart’s stock surged approximately 6% following strong quarterly sales growth and an optimistic outlook for the fiscal year. Chip stocks, led by Advanced Micro Devices, also contributed to the market’s positive momentum.
Looking ahead, investors will be monitoring a busy economic calendar, including data on housing starts, jobless claims, and the Philadelphia Fed’s manufacturing business outlook survey. Additionally, Fed speakers, including Cleveland Fed President Loretta Mester, will provide insights on the central bank’s stance on interest rates.
U.S. Treasury yields were higher on Thursday, with the 30-year yield up nearly 1 basis point to 4.51%, the 10-year yield up 4 basis points to 4.37%, and the 2-year yield up 6 basis points to 4.80%.
Overall, Wall Street’s milestone achievement and positive market performance reflect a combination of strong corporate earnings, favorable economic data, and investor optimism about the future trajectory of the economy.
