Stock market news for May 16, 2024: Dow 40,000

The Dow Jones Industrial Average closed slightly lower on Thursday after briefly jumping above 40,000 for the first time.

At its intraday high, the blue-chip average hit 40,051.05, the culmination of a bull market that began in October 2022. The index had approached 40,000 earlier this year before a slight pullback in April on worries about high interest rates sent it tumbling. back. The rally reignited in May thanks to good earnings and some soft inflation readings.

Ultimately, the 30-share Dow ended the day down 38.62 points, or 0.1%, at 39,869.38. The S&P 500 fell 0.21% to close at 5,297.10. The Nasdaq Composite it ended the day down 0.26% and ended at 16,698.32.

During the session, the broader market index also rose to a new record after closing above the 5,300 level for the first time on Wednesday, while the tech-heavy Nasdaq hit an all-time high. The Dow is up nearly 6% in 2024, while the Nasdaq and S&P 500 are up 11% each.

“This achievement is a testament to the powers of capital formation, innovation, earnings growth and economic resilience,” said John Lynch, Chief Investment Officer of Comerica Wealth Management. “Recent technical momentum and fundamental strengths, including earnings and interest rates, suggest further gains in the near term.”

Was Walmart which carried the Dow load above 40,000 as the world's largest retailer rose nearly 7% on strength. first quarter fiscal results. Walmart is now up 21% in 2024.

The Dow's march toward 40,000 comes as expectations of interest rate cuts and excitement around artificial intelligence boost investor sentiment. According to CME Group's FedWatch tool, the price of the Federal Reserve's first rate cut is priced in September. That expectation grew after a smaller-than-expected increase in consumer prices for April reported earlier this week.

In addition to this, technology-related darlings like now Amazon, Metaplatforms i Nvidia they are all very up to date so far.

Amazon, which just joined the century-old Dow in the first quarter, is up more than 20% for the year. Other top Dow performers this year include American Expressan increase of around 29% during the period, and Goldman Sachs, 20%. Those names rose as investors bet the economy would avoid a recession and the consumer would remain strong.

Baird analyst Ross Mayfield believes this rally still has the strength to continue.

“This has all the signs of a cyclical bull market and it's not running out as far as we can tell,” he told CNBC in an interview.