The bout of inflation that followed the COVID-19 pandemic led to another sharp sell-off in 2022. Between Jan. 7, 2022, and Sept. 30, 2022, the Dow declined about 21% from 36,231.66 to 28,725.51. Perhaps the most infamous trough was during the Great Depression, in which the Dow lost about 90% of its value https://www.forex-reviews.org/ over three years.

Correlation among components

The close was just shy of a previous record close of 40,003 set on May 17. On March 29, 1999, the average closed at 10,006.78, its first close above 10,000. This prompted a celebration on the New York Stock Exchange trading floor, complete with party hats.55 Total gains for the decade exceeded 315%; from 2,753.20 to 11,497.12, which equates to 12.3% annually.

• Besides squeezing tighter on U.S. households’ budgets, stubbornly high inflation is likely to keep the Federal Reserve on hold for a while when it comes to providing relief to Americans through lower interest rates.
• So, a higher percentage move in a higher-priced component will have a greater impact on the final calculated value.
• The Dow is not calculated using a weighted arithmetic average and doesn’t represent its component companies’ market cap, unlike the S&P 500.
• Traders were confident in a business-friendly Republican president.
• Stock market gains since the 2008 financial crisis were mediocre in volume.

(1 record close)

The DJIA was designed to serve as a proxy for the health of the broader U.S. economy. Often referred to simply as the Dow, it is one of the most-watched stock market indexes in the world. While the Dow includes a range of companies, all can be described as blue chip companies with consistently stable earnings.

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Through much of 2022 and 2023, investors were cautious and bearish about equity markets as inflation rocketed. Then, in the last few months of 2023, investors began piling back in as hopes grew that interest rates would soon be cut and a nasty recession averted. By the end of 2023, the previous high, registered in January 2022, had been surpassed, and the 37,000 mark had been breached.

2009 Recession

The market responded positively to wholesale prices increasing 0.2% last month, higher than Kraken Review projections of 0.1%, according to FactSet. The S&P 500 index and Nasdaq have similarly peaked at record highs this year as technology stocks like Nvidia have swelled—though Nvidia is not a Dow Jones component. A secular bull market is a period in which the stock market index is continually reaching all-time highs with only brief periods of correction, as during the 1990s, and can last upwards of 15 years.

• While it wasn’t as dramatic as the Great Depression, the drop happened much more quickly.
• The Dow gained 3,472.56 points during 2013, higher than any prior year on record.
• Many critics argue that the Dow doesn’t truly represent the state of the whole U.S. economy, given that it consists only of 30 large-cap U.S. companies.
• The following is a list of the milestone closing levels of the Dow Jones Industrial Average.
• That implies plenty of time for negotiations that could ease the ultimate impact.
• The most recent record closing occurred on Jan. 4, when the index closed at 36,799.65, blowing past the all-time high closing of 36,585.06 it had just a day before.

The Dow tracks 30 large, publicly owned blue-chip companies trading on the New York Stock Exchange and the Nasdaq. The selection is not based on strict quantitative criteria but rather on the decisions of the editors of the Wall Street Journal. Companies are chosen based on their reputation, growth, and relevance to the economy, with the aim of reflecting the overall health and trends of the industrial sector of the U.S. economy. Since the Great Depression, 2007 to 2008 has been the most dramatic period for the DJIA. The market fell more than 50% in just a year and a half because of subprime mortgage and credit crisis that kicked off the Great Recession.

Record Highs Set in 2013

It hit a low of 41.22 in 1932 (about 908 points, inflation-adjusted). The Russell 2000 index of smaller companies fell 2.20 points, or 0.1%, to 2,279.98. Besides squeezing tighter on U.S. households’ budgets, stubbornly high inflation is likely to keep the Federal Reserve on hold for a while when it comes to providing relief to Americans through lower interest rates. While the 40,000 milestone is attention-grabbing, Day trading strategies the number itself means little to investors.