The Dow Just Hit 40,000. Here’s Where Pros See Stocks Headed Next. (2024)

FAQs

Has the Dow ever been at $40,000? ›

The Dow Jones Industrial Average topped the 40,000-point level at Friday's close for the first time in its history. Originating way back in 1896 and often considered a barometer of the overall U.S. economy, the index tracks the performance of 30 blue-chip companies.

“What kept driving the markets to new highs were companies that are insensitive to persistently higher interest rates,” says Haworth. “Large companies like Nvidia, Microsoft, Amazon and Google that hold a lot of cash and have low borrowing needs are not greatly affected by changes to the interest rate environment.”

Robust economic data has spooked investors, who worry that signs of a stronger economy could push the Federal Reserve to keep interest rates higher for longer as it battles to bring down inflation. US markets have had a rough week.

S&P 500 forecast

Wall Street analysts are projecting that S&P 500 companies will continue to overcome rising costs. Analysts estimate S&P 500 earnings increased 9.2% year over year in the second quarter. They project another 8.3% in the third quarter and anticipate 17.5% in the fourth.

Traders work on the floor of the New York Stock Exchange on May 16, 2024. Wall Street is buoyed by hopes the Federal Reserve will pull back on its restrictive monetary policy after data showed inflation is beginning to ease.

Key Points

The Dow Jones Industrial Average is comprised of 30 time-tested, multinational businesses. If history is correct, the Dow will turn the page on 50,000 well before the turn of the decade. A trio of catalysts practically ensure that the Dow Jones will head higher over the long run.

There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.

Anthony Denier, CEO of the trading platform Webull, says he believes the stock market will ultimately post a positive return in 2024 as investors anticipate interest rate cuts by the Fed.

Unlike the rapidly dwindling balance in your brokerage account, cash will still be in your pocket or in your bank account in the morning. However, while moving to cash might feel good mentally and help you avoid short-term stock market volatility, it is unlikely to be a wise move over the long term.

And the shocking leader of the bunch? President Calvin Coolidge, who took office in 1923, whose stock price performance change was a whopping 208.52%, for an average monthly return of 1.74%. That's the largest for any president since the start of the 20th century.

What was the worst one day drop in the stock market? ›

Some sources (including the file Highlights/Lowlights of The Dow on the Dow Jones website) show a loss of −24.39% (from 71.42 to 54.00) on December 12, 1914, placing that day atop the list of largest percentage losses.

The 1987 stock market crash, or Black Monday, is known for being the largest single-day percentage decline in U.S. stock market history. On Oct. 19, the Dow fell 22.6 percent, a shocking drop of 508 points. The crash was somewhat of an isolated incident and didn't have anywhere near the impact that the 1929 crash did.

The Big Money bulls forecast that the Dow Jones Industrial Average will end 2024 at about 41,231, 9% higher than current levels.

Investors might sell a stock if it's determined that other opportunities can earn a greater return. If an investor holds onto an underperforming stock or is lagging the overall market, it may be time to sell that stock and put the money to work in another investment.

The Dow posted its all-time high during intraday trading on May 16, 2024, reaching a peak of 40,051.05 points. The highest close occurred the day before when the index closed at 39,908.00 points. The peak was led in part by optimism that the Federal Reserve could cut interest rates later this year.

It was 25 years ago today, March 29th, 1999, that the Dow Jones Industrial Average (DJIA) topped the 10,000 mark for the first time.

On November 14, 1972, the Dow Jones Industrial Average (DJIA) crossed the 1,000-point mark, 21,652 days after its inception on October 7, 1896. The index had topped 100 in 1906, 300 in 1928, 500 in 1956, 700 in 1961 and 900 in 1965.

That said, we've never seen a fall as dramatic as the stock market crash of 1929, after which the Dow lost nearly 90% of its value over the course of three years. In 1932, it reached its all-time low of 41.22. The Dow's most volatile period in recent history took place during the Great Recession of 2007–2008.