DJI: Dow Jones Cracks 40,000 Points for the First Time Ever. What’s Behind the Rally?

30-stock index is powered by cooling inflation and upcoming interest rate cuts (hopefully).

• The Dow Jones Industrial Average DJI on Thursday blasted above the 40,000 mark for the first time ever. Just after it snapped an 8-day winning streak, the 30-stock benchmark kicked into gear and soaked up the rarefied air above the historical milestone, powered by a mosaic of positive data. What’s behind the breakneck rally?
• The Dow clocked out of the first quarter with a solid 5.5% gain, and extended the upside in May, riding on a flurry of good news, economic reports and bright prospects for even more growth. More recently on Wednesday, the US released its consumer price report, showing that inflation moderated to 3.4% in April. It is the Federal Reserve’s dreamlike scenatio and a stepping stone toward the three planned interest rate cuts that are hopefully coming this year.
• The S&P 500 and the Nasdaq are also enjoying the good life in record territory. The broad-based index logged its best first quarter since 2019 with a 10% increase and hit 5,300 points on Wednesday. The tech-heavy index is eyeing 16,800 points after soaring nearly 14% on the year. The gains for the Nasdaq, it must be noted, are largely concentrated in a few select stocks, including chip giant Nvidia NVDA, social media behemoth Meta META, and ChatGPT backer Microsoft MSFT.