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Dow Jones closes above 38,000 for the first time ever

The Dow Jones Industrial Average closed above 38,000 for the first time ever on Monday, setting a record high. The S&P 500 also reached a record high, closing at about 4,850, while the Nasdaq hit 15,360 by the end of trading on Monday.

The recent surge is driven in large part by optimism about the prospects for a “soft landing,” in which inflation comes down to normal levels while the economy avoids a recession, with investor enthusiasm about AI also helping to drive returns. The recent market rally is also said to be in part the result of expectations among some investors of interest rate cuts at the Federal Reserve, anticipated as soon as March. Interest rate cuts would lower borrowing costs for consumers and businesses, potentially triggering a burst of economic activity through greater household spending and company investment. The Fed, however, risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand could lead to an acceleration of price increases.

Federal Reserve Governor Christopher Waller said early last week the central bank expects to cut rates this year, but that it won’t be “rushed” to make the decision soon.

https://www.cnbc.com/2024/01/21/stock-market-today-live-updates.html

Editorial credit: nyker / Shutterstock.com

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