Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
The Dow Jones Industrial Average reached a milestone on Thursday that seemed unimaginable a year ago.
The 30-stock benchmark broke 40,000 for the first time. The move comes as investors cheer the prospects that artificial intelligence will boost corporate profits and the Federal Reserve may cut interest rates later this year as inflation retreats further from its pandemic highs.
It’s been a long and winding road for the Dow to reach these levels. Here’s a look at the Dow’s performance over the last 20,000 points.
The Dow closed above 20,000 for the first time in early 2017 as investors began to price in lower corporate taxes in the U.S. under former President Donald Trump. These expectations were fulfilled towards the end of the year and caused the Dow Jones to rise above 25,000 points in January 2018.
However, the Dow struggled in 2018 after excitement over lower taxes faded, trade tensions between China and the U.S. increased and the Federal Reserve raised interest rates. The Dow ended the year down more than 5%.
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In 2019, the stock market rallied as the Fed backed away from raising interest rates. In early 2020, the Dow approached 30,000 and peaked at 29,551.42 on February 12, 2020.
Then came the Covid-19 pandemic. The Dow fell 38% from its intraday peak in February 2020 to a low of 18,213.65 in March 2020.
In the following months, the benchmark rallied as progress in developing Covid vaccines accelerated and the Fed and lawmakers took unprecedented measures to support the economy. In November 2020, the Dow closed above 30,000 points for the first time.
The momentum from the Covid lows continued into 2021, with the Dow breaking 35,000. The good times wouldn’t last much longer, however, as a bear market pushed the Dow as low as 28,660.51 before recovering. Since hitting that low, the Dow is up 40%.
—CNBC’s Gabriel Cortés contributed reporting.
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2024-05-16 19:34:28
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