New Delhi [India], May 17 (ANI): In the US market on Thursday, the Dow Jones Industrial average index crosses 40,000 level for the first time, The expert said that the recent rally in the index is amid the hopes of rate cuts from the fed in the coming months.
The Dow rose as high as 40,051.05 during the trading session and declined to 39,869.38 by the time of closing.
Earlier in the April month the index tried to cross the 40,000 mark but closed near it after a pullback in the market on worries about the high interest rates. The 30000 mark was crossed by Dow Jones in November 2020.
In the last year, the index has gained more than 19 per cent as investors are showing confidence in the market.
In the other market indices of U.S., the S&P 500 fell 0.21 per cent on Thursday, closing at 5,297.10. While the Nasdaq Composite finished the day lower by 0.26 per cent, ending at 16,698.32.
“The Dow Jones hit the psychological mark of 40000. The biggest issue the world is facing today is inflation, and due to consistently higher inflation, rate cuts have not been happening in the US. The core inflation number yesterday in the US came as a surprise, with an overall cooling in the numbers,” said Vivek Karwa, VRIDHI Investment.
He further added, “This has increased the hope of rate cuts this year and hence the buying in the market. The news is going to be favourable for Indian markets as well.”.
Markets had rallied to new record highs Wednesday after the latest Consumer Price Index showed a cooldown for the first time in months, stoking hopes that the Federal Reserve could start cutting interest rates as soon as September says CNN
On a monthly basis, the inflation report showed that prices rose 0.3 per cent, a slower pace than in the two months prior, according to the Bureau of Labor Statistics. Economists were expecting a 0.4 per cent monthly increase, according to FactSet consensus estimates.
Another key data point added to the enthusiasm, April retail sales came in significantly weaker than expected, indicating that consumers are pulling back on the spending that drives the economy. Spending missed the 0.4 per cent increase that economists had projected.
The Dow Jones Industrial Average Index comprises stocks of 30 major companies such as Apple, Walmart, Nike, and Boeing on the New York Stock Exchange (NYSE). It was established on May 26, 1896, and is one of the world’s oldest and most widely followed equity indices.
Meanwhile in the Indian markets on Thursday, the NSE Nifty 50 surged 203 points, or 0.92 per cent, closing at 22,403.85, while the BSE Sensex climbed 676 points, or 0.93 per cent, settling at 73,663.72.(ANI)
