In a first-hand display of soaring investor confidence in U.S market, the 30-stock index of America’s blue-chip stocks made an intraday high of 40,051.05 – setting a historic record
Dow Jones Industrial Average, a 30-stock index of America’s blue-chip stocks of major conglomerates such as Apple, Walmart, Nike, and Boeing, recorded an intra-day trade of slightly-above than 40,000 mark, demonstrating a huge power jump.
The Dow Jones Industrial Average crossed a significant 40,000 mark for the first time on Thursday, May 16. A combination of diverse factors have fueled Dow’s one day trip. The race to 40,000 threshold could be the fastest 10,000-point gain in the index’s history if it maintains linear consistency at the close.
DJI’s record-breaking performance at the United States stock exchange is a direct indicator of how market trends influence key investment decisions. It will positively impact the entire US economy. Most importantly, it has once again ignited hope among investors that the Federal Reserve might announce interest-rate cuts any day now.
Consumer Price Index behind Dow’s record – 40,000 mark
Investor sentiment turned positive a day after the US Bureau of Labor Statistics released its most anticipated report on consumer price index. The report felt like a relief for investors who were struggling under stifling conditions, especially after the Federal Reserve dismissed calls for an interest-rate cut. The report summarized lower than expected increase in consumer price on a month-to-month basis. The consumer prices rose 0.3% from March, indicating that inflation is slowing down.
On Tuesday, May 14, Federal Reserve Chair Jerome Powell reiterated that he expects inflation to ultimately reach the central bank’s 2% target. The renewed confidence among Federal Reserve officials was also a sign of further relief for investors. Interest rates are the dominating force that decide how well stock market is going to perform during a particular quarter.
Walmart (WMT) led the Dow index on Thursday, rising 7% after blowing past Wall Street’s expectations with its first-quarter earnings report. Cisco (CSCO) shares fell 2.7% after its first-quarter earnings fell short of estimates despite better-than-anticipated-revenue. Retail data also suggested that U.S consumers are finally moderating their spending after a yearlong shopping spree fueled by pandemic-era savings.
Retail sales disclosed for the month of April in the CPI report summarized that consumers have been positively impacted by higher interest-rates, in consequence to which consumer spending fell drastically, another crucial metric for decoding inflationary growth in the economy.
