This stock market index, also known as the Dow or DIJA, tracks 30 large blue-chip companies on the NYSE and Nasdaq. Although the Dow isn’t as big as the S&P 500 or the Nasdaq, neither of them has been as influential or popular enough to be the subject of a Broadway musical. This high occurred only 42 trading sessions after closing above 19,000. That is the second-fastest rise in U.S. history (currently, the record is 24 sessions to go from 10,000 to 21,000 in 1999). In 2019, the Dow hit two milestones and set 22 record closes. On July 3, the Dow hit a new high when the Trump administration announced it would resume trade negotiations with China, averting additional tariffs (taxes on imports).

Wednesday’s rally is “all about the Fed,” said Peter Cardillo, chief market economist at Spartan Capital Securities, pointing to rate cuts now penciled in for 2024. Building on that, Salesforce and Microsoft are leaning into the growing demand for artificial intelligence (AI). In fact, Morgan Stanley analyst Keith Weiss argues Microsoft in particular is the software company best positioned to monetize generative AI.

1. In the midst of a recession, the Dow has two milestone days of gains.
2. “But the lack of pushback on easing financial conditions as inflation continues its trend lower should be enough to continue to support the Santa Claus rally for the time being,” Jamner said.
3. Investors in funds that track the Dow gain exposure to all the stocks listed on the index.
4. The tech-heavy Nasdaq inched up to 15,360 by the end of trading on Monday.
5. A bull market, or a bull run, is an extended period of rising stock prices.
6. The Dow is the second-oldest U.S. market index still in use, after the Dow Jones Transportation Index.

The index closed above 23,000 on Oct. 18, 2017; slightly more than a month later, it broke 24,000. The Dow had two streaks lasting more than 10 days, which had not occurred since 1959. That’s the percentage of stocks listed on the S&P that have gained this November, as the breadth of the rally extended far past the “Magnificent Seven” big tech stocks which powered much of the early 2023 rally. This sounds good, but it’s undoubtedly the wrong approach. It’s incredibly difficult to quickly move in and out of stocks to avoid the worst days and take advantage of the best days, as no one can figure this out consistently ahead of time. The 30 largest blue-chip stocks within the Dow Jones Industrial Average index surged to unprecedented highs, eclipsing the 37,000-point mark on Wednesday.

The Dow Jones Industrial Average (the Dow) is an index of the 30 top-performing U.S. companies. The most recent all-time-high record (as of this writing) was on Jan. 4, 2022, when it closed at 36,799.65. If the current gains hold, this will be the Dow’s best month since October 2022, the S&P’s best since July 2022 and the Nasdaq’s best since January, according to FactSet data.

After all, no one wants to put money to work when they think they could lose it. The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.152 as of November 2021[update]. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split. The recent surge follows a stellar showing for markets in 2023, 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. During the recession around the turn of the 21st century, the DJIA fell from 11,723 in Jan. 2000 to 9,389 in March 2001, dropping 20%. The recession from 1973 to 1975 was also especially troublesome for the DJIA, falling 45% from its 1,051 peak in 1973 to just under 600 in 1974.

History says the Dow Jones is headed much higher

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The number of companies included in the index increased to 20 in 1916 and then to the current level of 30 in 1928. Since its inception just before the onset of the 20th century, the DJIA has remained one of the most frequently discussed and commonly tracked equities indexes. The Dow Jones Industrial Average scored both an intraday high and a record close on Wednesday after the Federal Reserve signaled a pivot to rate cuts was likely in 2024.

Major Stock Indexes

Similarly, Microsoft is the leader in enterprise software-as-a-service and operates the second-largest cloud computing platform; those markets are also projected to grow by 14% annually through the end of the decade. The market rally in recent days could owe in part to expectations among some investors of interest rate cuts at the Federal Reserve as soon as March. While a market index itself cannot directly be invested in, you can invest in the Dow through index funds and exchange-traded funds (ETFs) such as the SPDR Dow Jones Industrial Average ETF Trust (DIA). Investors in funds that track the Dow gain exposure to all the stocks listed on the index.

Markets tend to rise as the economy expands, the Dow is no exception, although it reflects periods of volatility, is the second-oldest U.S. market index still in use. The Dow fell 17% in three months, from 2,864.60 on Aug. 2 to 2,365.10 on Oct. 11, 1990. On Aug. 17, 1998, Russia devalued the ruble and defaulted on its bonds. By Aug. 31, the Dow had fallen 13%, from 8,714.64 on Aug. 18 to 7,539.06 on Aug. 31.

The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Historically, markets tend to rise as the economy expands, and the Dow is no exception. The Dow rises 19.2% during a recession due to strong business spending, even after wartime government spending drops. The Dow’s largest percentage drop in history happened when the market crashed on October 19, 1987—on what is now known as Black Monday—and the Dow lost 22.6% in a single day. As of March 2022, the Dow Jones’s all-time high at market close was 36,799.65, on Jan. 4, 2022.

The index had three nine-day runs, last occurring in 1955 (when there were four nine-day stretches). The Dow continuously moved higher eight months inside bar trading strategy in a row (the last occurrence of this was in 1995). It hit two of them in the first few weeks in January, closing above 25,000 on Jan. 4.

After a Hot January Inflation Report, Will the Fed Wait Longer to Cut Rates?

The Dow also lost 26.5% during the Cuban missile crisis of 1962. A number of records were set in 2019, thanks in part to trade talks with China. Journalist Charles Dow and his business partner, Edward Jones, established the Dow Jones Industrial Average in 1896, starting with 12 companies in the industrial sector.

The Dow ends a long bull market on Jan. 14, 2000, in part due to the strength of the Internet business and the subsequent bursting of the dot-com bubble. But it then falls on March 7, 2000, rebounds to 11,124.83 on April 25, and falls again to 9,973.46 by https://g-markets.net/ March 14, 2001, beginning the 2001 recession. It then enters a period of volatility and drops to 8,920.70 after markets open following the September 11, 2001 terrorist attacks. The recession ends in November 2002 after a period of uncertainty about war.

The chart below shows four of those closing records, as they increase by the thousand. That correction was more than 16% lower than its all-time high set in May of the same year, putting the index into a correction but not a bear market. Investors worried that China’s yuan devaluation and the uncertainty over the Fed’s rate increase would push the index further downward. The Dow suffered a market correction between August 2015 and April 19, 2016, leading to a 2016 downturn. It began on Jan. 4, when the Dow closed 160 points lower as investors worried about a slowdown in China’s economic growth.

“Powell was understandably hesitant to declare victory with regard to avoiding a recession,” Josh Jamner, investment strategy analyst at ClearBridge Investments, wrote in emailed comments. “But the lack of pushback on easing financial conditions as inflation continues its trend lower should be enough to continue to support the Santa Claus rally for the time being,” Jamner said. Past performance is never a guarantee of future returns, but crossing the bull market threshold has historically been a good sign for stocks. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.

The previous high was recorded just a day prior, when the index ended the trading day at 36,585.06. Even with the market at or near its all-time high, it’s still smart to be invested in stocks. Remember, those who have patience, a long-term mindset, and who invest early and often get rewarded.