Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Dow Jones Industrial Average reached a milestone Thursday that seemed unfathomable a year ago.
The 30-stock index topped 40,000 for the first time. The move comes as investors cheer on the prospect of artificial intelligence boosting corporate profits and the Federal Reserve may cut rates later this year as inflation continues to ease from pandemic highs .
The Dow Jones Industrial Average had a long and winding road to get to these levels. Here’s a look at the trajectory of the Dow Jones Industrial Average over the last 20,000 points.
The Dow Jones Industrial Average closed above 20,000 for the first time in early 2017 as investors began to count on lower U.S. corporate taxes under former President Donald Trump. These expectations were realized by the end of that year, and by January 2018, the Dow Jones Industrial Average exceeded 25,000 points.
However, the Dow Jones Industrial Average struggled in 2018 after the tax cut frenzy died down amid rising trade tensions between China and the United States and higher interest rates by the Federal Reserve. The Dow Jones Industrial Average ended the year down more than 5%.
The stock market rebounded in 2019 as the Fed decided against raising rates. By early 2020, the Dow Jones Industrial Average was approaching 30,000, peaking at 29,551.42 on February 12, 2020.
Then came the Covid-19 pandemic. The Dow fell 38% from its intraday peak in February 2020 to its low of 18,213.65 in March 2020.
The benchmark will recover in the coming months as progress on a Covid vaccine accelerates and the Fed and lawmakers take unprecedented steps to support the economy. By November 2020, the Dow Jones Industrial Average closed above 30,000 for the first time.
The momentum from the Covid lows continued into 2021 as the Dow topped 35,000. However, the good times were short-lived as the bear market sent the Dow down to 28,660.51 before it recovered. Since hitting that low, the Dow Jones Industrial Average is up 40%.
— CNBC’s Gabriel Cortez contributed reporting.