Dow Jones Briefly Hits 40K for First Time

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Facts

  • The Dow Jones Industrial Average (DJI) briefly hit 40K for the first time ever on Thursday before closing the day at 39,869, down 0.1% from the previous day.1
  • The other two major indexes – the S&P 500 and Nasdaq Composite – each fell 0.2% and 0.3%, respectively.2
  • Walmart's 6% jump after its strong quarterly report helped fuel the Dow's rise, and the index itself has gained 6% in 2024 and 1K points since November 2020. Goldman Sachs has had the largest gains since that time.3
  • An inflation report fueled a market rally on Wednesday, as consumer prices rose 0.3% over the last month — a slower pace than in previous months. However, the Federal Reserve will still monitor inflation before deciding on whether to lower interest rates.2
  • GameStop and AMC Entertainment experienced major losses after stunning jumps to start the week. Meanwhile, an underwhelming report on the homebuilder industry caused Treasury yields to rise despite hope that the economy could hit a sweet spot.4
  • Unlike other major stock indexes, the Dow tracks 30 of the most valuable US companies across various industries. While high inflation and interest rates have typically lowered stock prices, investors have been eager to invest in the market.5

Sources: 1Yahoo Finance, 2CNN, 3FOX News, 4Associated Press and 5Forbes.

Narratives

  • Pro-establishment narrative, as provided by Insights. The stock market is rallying, and all signs point to the turbulent US economy making a soft landing. While the fight against inflation isn't necessarily over, investors are clearly optimistic about the direction of the economy as market sentiment continues to improve. The stock market is up and inflation is finally cooling, which is all you could want from the economy.
  • Establishment-critical narrative, as provided by ZeroHedge. The headlines may read that major stock indexes are up, but there are clear signs that the US economy could be heading towards a recession. Huge rises in certain stocks don't change the fact that inflation and interest rates remain quite high with no end in sight. It appears that the stock market is hitting the high end of a very volatile period, but that shouldn't provide much assurance about a supposed 'soft landing' for the US economy.

Predictions