OAN’s James Meyers
10:34 AM – Thursday, May 16, 2024
The Dow Jones Industrial Average hit the 40,000 point threshold for the first time ever on Thursday as investors on Wall Street were feeling timid over the idea of interest rate cuts.
The Dow surpassed its previous record high of 39,935.04, hit on Wednesday, and has increased almost 40% since October 2022.
At 11:03 a.m. ET, the Dow was up 0.31%, at 40,033.02.
“Breaking the 40,000 barrier is a big psychological boost for the bulls as round numbers hold special significance in people’s hearts and minds,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a note.
“We are in a Bull Market and people are showing some irrational exuberance (meme stocks) and dismissing bad news (slowing retail sales) and focusing on good news (slightly slowing inflation).”
Meanwhile, stock markets have soared since the beginning of 2024, as investors have banked on an AI-led rally, increased earnings and hopes that the central bank will ease monetary policy this year.
Additionally, all three major U.S. indexes hit fresh day trading record highs on the day.
Amazon and American Express are among the largest percentage recipients so far this year, up 29% and 22% of the 30 companies on the Dow.
Meanwhile, the Dow’s worst performer so far has been chipmaker Intel, which trails other players in the surging market for AI components, decreasing a staggering 37% since the start of the year.
Due to the consistently negative press coverage related to the company’s operations and employees, Boeing is right behind Intel with a 30% year-to-date loss.
For the Dow to climb from the 30,000 mark to the 40,000 mark, it took just over three years, which is a faster increase than the previous 10,000-point chamber.
However, the latest inflation report for the month of April revealed that the inflation rate was still higher than the Fed’s 2% target.
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