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The Dow Jones Industrial Average closed slightly lower on Thursday, briefly reaching above 40,000 for the first time in its history. This milestone was the result of a bull market that began in October 2022. The index had previously neared the 40,000 mark earlier in the year before a slight pullback in April due to concerns about high interest rates. However, the rally was reignited in May with strong earnings and softer inflation readings. Ultimately, the Dow closed at 39,869.38, down 38.62 points, or 0.1%, for the day.

The S&P 500 and Nasdaq Composite also finished lower, with declines of 0.21% and 0.26%, respectively. The broader market index reached a new record by closing above 5,300 for the first time ever, while the Nasdaq hit an all-time high. In 2024, the Dow has climbed nearly 6%, while the Nasdaq and S&P 500 are up 11% each. Chief Investment Officer John Lynch noted that this achievement is due to capital formation, innovation, profit growth, and economic resilience. He also stated that technical momentum and fundamental strengths suggest further gains in the near term.

Walmart played a significant role in leading the Dow’s charge above 40,000 with a nearly 7% increase on strong fiscal first-quarter results. The retailer is now up 21% in 2024. Investor sentiment has been boosted by expectations of interest rate cuts and enthusiasm surrounding artificial intelligence. The first Federal Reserve rate cut is expected in September, with tech-related companies such as Amazon, Meta Platforms, and Nvidia experiencing substantial gains year to date. Amazon, which recently joined the Dow, has seen a more than 20% increase in its stock price since the beginning of the year.

Other top performers in the Dow include American Express, up about 29%, and Goldman Sachs, up 20%. Investor confidence is high as they bet on the economy avoiding a recession and consumer strength remaining robust. Analyst Ross Mayfield believes that the rally still has momentum and shows signs of a cyclical bull market that is not running out of steam. Overall, the market continues to show strength and resilience, with positive indicators such as earnings, interest rates, and consumer prices contributing to the optimism among investors.

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