Stock Market News Today: Markets rise, Dow tops 40,000 for the first time (SP500)

Wall Street on Thursday achieved a big milestone after the blue-chip Dow (DJI) crossed 40,000 points for the first time ever. A post-earnings jump in Walmart (WMT), along with strength in chip stocks, buoyed equities.

Markets are coming off a record-breaking session on Wednesday, with all three indexes notching closing highs after favorable economic data on inflation boosted expectations for Federal Reserve interest rate cuts. Notably, the benchmark S&P 500 (SP500) surpassed and closed above the 5,300 points mark for the first time.

The tech-heavy Nasdaq Composite (COMP:IND) was last up 0.08% to 16,756.12 points in mid-day trade, while the S&P (SP500) was higher by 0.12% to 5,314.68 points.

The Dow (DJI), Wall Street’s most venerable stock index, had gained 0.18% to 39,979.19 points. It earlier hit a session high at 40,051.05 points, marking nearly three and a half years since the index hit 30,000. Comprised of 30 of the biggest firms in the U.S. including Walmart (WMT) and Apple (AAPL), the Dow (DJI) has now advanced nearly 6% in 2024.

U.S. President Joe Biden and Vice President Kamala Harris released a statement on the milestone, calling it another example of how Biden has “strengthened” the economy and has helped secure “the retirement of millions of Americans across the country.”

In yesterday’s session, the latest consumer price index (CPI) report came in a shade cooler on the headline number. That, coupled with retail sales coming in flat and a declining gauge of manufacturing activity, led to market participants raising their odds for interest rate cuts. The combination of slowing inflation and a decelerating economy is what the Fed wants to see in order to gain confidence to ease policy.

Nick Timiraos, the Wall Street Journal’s Fed watcher, was slightly pessimistic in his reaction to the consumer inflation data. “April CPI takeaways for the Fed: One good print can’t offset three unfavorable ones. It may take a couple more for officials to get over the PTSD of the Q1 inflation; It reduces the risk of any shift to a neutral bias (ie, open the door to hikes),” he said on X (formerly Twitter) on Wednesday.

Turning to Thursday’s action, Walmart (WMT) surged ~6% and was the top percentage gainer on both the S&P (SP500) and the Dow (DJI). The U.S. retail giant delivered strong quarterly comparable sales growth in its U.S. and Sam’s Club businesses, and lifted its fiscal full year revenue and adjusted profit guidance.

Chip stocks provided a bit of a boost to the Nasdaq (COMP:IND), led by Advanced Micro Devices (AMD). Wolfe Research replaced AMD with Nvidia (NVDA) on its Alpha List, though it said its bullish views on both companies had not changed. Marvell Technology (MRVL) was another notable gainer.

Looking at Thursday’s economic calendar, it was fairly busy. Before the opening bell, data showed housing starts increased in April, while building permits fell. At the same time, the number of Americans filing for initial jobless claims in the past week fell less than expected. Finally, the Philadelphia Fed’s manufacturing business outlook survey for May showed activity in the region weakened overall.

Investors will also be hearing from a slew of Fed speakers through the day, including Cleveland Fed President Loretta Mester who, speaking at at an event in Ohio, said that the central bank will need more time to gather data before cutting interest rates.

U.S. Treasury yields were higher on Thursday. The longer-end 30-year yield (US30Y) was up nearly 1 basis point to 4.51%, while the 10-year yield (US10Y) was up 4 basis points to 4.37%. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 6 basis points to 4.80%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.