The Dow Jones industrial average closed above the 40,000 mark for the first time on Friday, with other major indexes also scoring weekly gains, as data supported expectations for interest rate cuts by the Federal Reserve this year.
The blue chip index climbed 134.21 points, or 0.3%, to 40,003.59 — the fifth straight weekly gain. The S&P 500 rose 0.1% while the Nasdaq edged down less than 0.1%. Both scored a fourth straight week of gains.
Strong corporate results and inflation and other economic data have bolstered investor hopes for Fed rate cuts this year. For the week, Dow gained 1.2%, S&P 500 rose 1.5%, and Nasdaq climbed 2.1%.
“Today is a bit of a digestion day: we just broke out through record highs and now we’re on a fourth straight week of gains, and the market appears to take a breaker,” said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta.
Traders see a 68% chance of the Fed’s first rate cut in September, the CME FedWatch Tool showed.
“For all the times that I’ve seen the market hit milestones and new highs, there’s almost always consolidation around it even though it seems it’s all psychological,” said Tom Plumb, chief executive and portfolio manager at Plumb Funds in Madison, Wisconsin.
“People have got mixed signals on inflation this week and the next big catalyst is next week when Nvidia reports. So it’s one of those days when you seem to be biding your time.”
Advanced Micro Devices gained 1.1% after Microsoft said it plans to offer its cloud computing customers a platform of AMD artificial intelligence chips that will compete with components made by Nvidia.
Reddit rose 10% following a partnership with OpenAI to bring its content to ChatGPT.
GameStop dropped nearly 20% after filing for a mixed-shelf offering and saying it expects first-quarter net sales to drop from a year ago.
