The Dow Jones Industrial Average (DJIA) surpassed the 40,000 level for the first time on Thursday, a significant milestone that reflects the ongoing confidence in the U.S. stock market. This achievement was fueled by hopes of interest rate cuts by the Federal Reserve later this year. Additionally, positive corporate earnings reports contributed to the market’s optimism.
Data released on Wednesday indicated a cooling in consumer price inflation, but this was somewhat offset by news on Thursday that U.S. jobless claims had decreased in the latest week. Figures also showed an increase in U.S. import prices last month. These developments boosted U.S. Treasury yields and the value of the dollar.
Initially, the Dow soared to a high of 40,051.05, while the S&P 500 and Nasdaq also reached record highs during early trading in New York. However, as the session progressed, stocks gradually lost momentum and ended slightly lower.
Shares of Walmart witnessed a significant jump of 7%, marking their largest one-day percentage gain since March 2020. This surge followed the retail giant’s upward revision of its fiscal 2025 sales and profit forecast.
At the close of trading, the Dow Jones Industrial Average had declined by 38.62 points (0.10%) to 39,869.38, the S&P 500 had lost 11.03 points (0.21%) to 5,297.12, and the Nasdaq Composite had fallen by 44.07 points (0.26%) to 16,698.32.
Despite concerns about inflation and consumer sentiment, Quincy Krosby, chief global strategist at LPL Financial, highlighted that the companies represented in the Dow continue to perform well, driven by strong earnings and positive guidance.
In the global market, MSCI’s gauge of stocks worldwide experienced a moderate increase of 0.04% to 794.08, reaching a third consecutive record intraday high. However, the STOXX 600 index in Europe declined by 0.21%.
Overnight in Asia, property shares in China and Hong Kong rallied amid reports that the Chinese government was considering a plan to purchase unsold homes across the country.
The dollar index, which measures the value of the U.S. dollar against a basket of currencies, gained 0.29% to 104.50, while the euro weakened by 0.16% to $1.0865. Against the Japanese yen, the dollar strengthened by 0.34% to 155.39.
Data released on Thursday revealed a decrease of 10,000 in the number of Americans filing new unemployment claims, bringing the seasonally adjusted total to 222,000 in the latest week. This indicates a continued strength in the labor market.
U.S. Treasury yields rebounded from their lowest levels in nearly six weeks following the jobless claims data and comments from Federal Reserve officials. The officials emphasized the need for further progress on inflation before considering interest rate cuts.
Benchmark 10-year yields increased by 2.3 basis points (bps) to 4.38%, recovering from their earlier decline to 4.313%, the lowest level since April 5. They are now trading above the 200-day moving average of 4.331%.
In the energy market, U.S. crude gained 60 cents to settle at $79.23 per barrel, while Brent crude rose by 52 cents to $83.27. Spot gold experienced a slight decline of 0.1% to $2,383.22 per ounce as of 1645 GMT, after reaching its highest point since April 19 earlier in the session. Bullion had gained over 1% on Wednesday.
