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Peter Davis

An writer at FOMOdrive

  • Dec 14, 2023
  • 2 min read

The Dow Jones index set a new historical record

Wednesday saw the Dow Jones Industrial Average close at an all-time high.

For the first time ever, the Dow Jones Industrial Average (DJIA) has surpassed 37,000 points.

For the first time since January 2022, the S&P 500 index has exceeded 4,700.

The US Federal Reserve meeting that concluded on Wednesday sparked a wave of optimism.

In 2024, the regulator may reduce rates by 75 basis points after having completed the rate increase cycle.

In March 2022, the Federal Reserve began raising interest rates, and the Dow Jones Industrial Average became the first major U.S. stock index to reach a new record since then.

On Wednesday, the blue-chip index rose 512.30 points to 37,090.24, following the Federal Reserve's announcement that they would be making three rate cuts in the coming year after their December meeting. This news was welcomed by investors.

On January 4, 2022, the index surpassed its previous closing high of 36,799.65 points.

For six consecutive weeks, the Dow Jones Industrial Average (DJIA) has been increasing, and it has risen 12% in 2020, due to optimism about the U.S. economy avoiding a recession and the excitement surrounding artificial intelligence.

In 2023, the S&P 500 saw a 22.6% increase, while the Nasdaq Composite Index has risen by 40.8% year to date. The broader market experienced even greater gains.

Investors have been expecting the cycle of raising interest rates to end for a couple of months, and the Fed's Wednesday announcement seemed to confirm this. Recent months have seen a sustained slowdown in inflation, bringing it closer to the central bank's target. Additionally, the strength of the overall economy has alleviated investors' concerns about the negative effects of high borrowing costs.

At a news conference, Chairman Jerome Powell stated that the Federal Reserve rate is currently at or close to its highest point. The Federal Open Market Committee (FOMC) predicted in September that the rate could reach 4.6% by the end of 2024, which is lower than the 5.1% forecasted.

Forecasts from major Wall Street banks, such as Deutsche Bank and RBC Capital Markets, are predicting that the US stock market will reach record highs in the coming year. This is due to the fact that stock indexes have already adapted to the high US interest rates.

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