Dow Jones Skyrockets To Record Heights, Shatters 37,000 Mark, Fueled By Fed's Dovish Stance

The 30 largest blue-chip stocks within the Dow Jones Industrial Average index surged to unprecedented highs, eclipsing the 37,000-point mark on Wednesday.

This rally followed the Federal Reserve’s decision to maintain interest rates steady at 5.25%-5.5%. The Dow climbed 1.2% after Federal Reserve Chair Jerome Powell effectively declared an end to the Fed’s rate-hiking cycle that commenced last year and hinted at the start of a rate-cutting cycle beginning in 2024.

The blue-chip index, as tracked by the SPDR Dow Jones Industrial Average ETF DIA, has channeled a rally of over 14% in the last six weeks and is on a streak of four consecutive sessions of gains.

Chart: Dow Jones Rallies Above 37,000, Setting New All-Time Highs

The Fed’s new economic projections reveal that policymakers suggested a median preference for rates at 4.6% by the end of 2024, signaling a tilt toward a 75-basis-point cut from current levels. The Fed’s forecasts anticipate rates will further decrease to 3.6% in 2025 and to 2.9% in 2026.

The market has reacted positively to these indications, increasing bets on rate cuts and now predicting a commencement in March 2024 with a total of six reductions throughout the next year, as per CME Group’s FedWatch Tool.

The Dow is the first among the major U.S. stock indices to breach the all-time high barrier previously reached in late 2021 or early 2022.

The tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust QQQ, is now just 1.1% away from its all-time high reached in November 2021, while the S&P 500 index, closely replicated by the SPDR S&P 500 ETF Trust SPY, is 2.3% short of its peak hit in early January 2022.

Dow Movers

The rally in the Dow was broad based, with 27 out of 30 stocks ending the day in the green. The only three laggards were International Business Machines Corp. IBM down 0.8%; Verizon Communication Inc. VZ down 0.8%; and Microsoft Corp. MSFT.

Here’s an overview of the top 10 gainers in the Dow Jones today:

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