Dow Jones closes above 40,000 for first time in history amid hopes of Federal Reserve rate cut

The Dow Jones Industrial Average on Friday closed above 40,000 for the first time in the 139-year-old index’s history.

Goldman Sachs, UnitedHealth, Microsoft, and Caterpillar were the top contributors to the historic first, according to The Wall Street Journal.

The Dow is a measure of 30 top US-based companies and is considered a key benchmark for the overall state of the economy.

The record-setting closing comes as firms expect the Federal Reserve to cut interest rates at some point this year, as inflation edges down towards the central bank’s 2 per cent target.

“That’s a fairly optimistic setup for at least the near future here in 2024,” Tom Hainlin, senior investment strategist at U.S. Bank Asset Management, told CNBC.

The Dow reached 40,000 for a period on Thursday as well, but closed below the historic benchmark.

All three major US stock indexes closed the week with gains, according to MarketWatch, with the Dow rising 1.2 per cent, the S&P 500 climbing 1.5 per cent, and the Nasdaq increasing by 2.1 per cent.

Earlier this week, the Bureau of Labor Statistics reported that between March and April, the consumer price index and core inflation both rose by 0.3 per cent. The core inflation reading was the lowest its been since April of 2021.

The is a breaking news story and will be updated with new information.