Index has more than doubled since spring 2020 as investors hope for interest rate cuts following Federal Reserve inflation figures
The Dow Jones Industrial Average passed 40,000 points for the first time on Thursday, powered by strong quarterly results from corporate America and rising bets of interest-rate cuts by the Federal Reserve.
The index has more than doubled since the spring of 2020 when the World Health Organization declared Covid-19 to be a global pandemic. The outbreak shuttered businesses worldwide as the death toll mounted. In its wake came supply chain issues that led to soaring inflation.
The US has staged a remarkable recovery despite widespread predictions of disaster in the face of runaway prices and the Federal Reserve’s aggressive series of interest rate hikes, aimed at tamping down inflation.
On Wednesday, government figures showed that the annual rate of inflation, which peaked at over 9% in June 2022, had slowed to 3.4% in April, down from 3.5% in the previous month.
The rate is still far higher than the Fed’s target of 2% annual inflation but the details in the report cheered investors and increased expectations that the Fed will start cutting interest rates later this year.
