Stocks moved sharply lower and bonds sold off after a 1 p.m. ET auction for 20-year Treasury notes hantec markets broker overview that saw weak demand and was “disappointing,” according to Chip Hughey, managing director for fixed income at Truist Advisory Services. The downturn reflected a 10-month recession, from July 1953 to May 1954, during the military demobilization following the Korean War. On Aug. 17, 1998, Russia devalued the ruble and defaulted on its bonds. By Aug. 31, the Dow had fallen 13%, from 8,714.64 on Aug. 18 to 7,539.06 on Aug. 31.
The close was just shy of a previous record close of 40,003 set on May 17. GameStop and AMC Entertainment were also sliding for a second straight day, pulling back further from their jaw-dropping starts to the week. They’ve been moving more on excitement drummed up by investors than any changes to their financial prospects. Homebuilders fell following the weaker-than-expected report on housing starts. They gave back some of their big gains the day before, when hopes for lower mortgage rates had sent them sharply higher.
Yields were holding relatively steady Thursday following some mixed data on the economy. Conversely, an encouraging drop in inflation reported earlier this week helped to fuel this latest rally. Consumer prices rose 3.4% from last April – a decline from March’s 3.5% annual increase. The CME FedWatch Tool shows investors still expect the Federal Reserve to cut interest rates twice by the end of the year. But the historic peak was delayed by strong economic news, an upturn in March inflation data and statements from Fed officials suggesting interest-rate cuts wouldn’t be coming soon.
Meanwhile, the US and China have begun feuding over chips again, less than two weeks after agreeing to a temporary pause in tariff hostilities. The Trump administration’s warnings against using AI chips by Huawei have undermined the recent trade talks in Geneva, China said, putting the fragile trade deal at risk and reviving worries about economic fallout. Markets are reassessing a recent rally, with the S&P 500 snapping a six-day run of gains as relief over the surprise US-China trade truce faded. Meanwhile, growing concern about the US deficit and ballooning debt has intensified attention on discussions around Trump’s tax-and-spending bill. Shares for most of the firms tracked by Dow rose in value on Friday, led by Intel (4.7%), IBM (2.8%) and Home Depot (2.6%), while shares for Walmart, Boeing and JPMorgan Chase fell slightly.
The Dow set two milestones in 2014 and set 39 closing records. Share repurchases among the S&P 500 companies were 59% higher in the first quarter of 2014 than the first quarter in 2013. It was the largest amount since 2007, right before the stock market crashed.
- The two-year yield, which moves more closely with expectations for action by the Fed, rose to 4.77 percent from 4.72 percent late Wednesday.
- Investors are worried about higher bond yields, which translate to heftier borrowing costs for corporations, individuals, and governments.
- In the autumn, it began to consistently close above 35,000 points, and by the last week in December 2021, it surpassed 36,000 points.
- The index had three nine-day runs, last occurring in 1955 (when there were four nine-day stretches).
- While the Dow is widely followed, some critics argue its limitations.
- First, the conflict between Russia and Ukraine saw gas prices spike sharply.
Recession
- Because of the price-weighted calculation method, a $1 change in the price of a stock in the DJIA doesn’t equate to one point in the index since that depends on the Dow divisor at the time.
- The longest bull market in history lasted about 11 years, starting in March 2009 and ending in February 2020.
- NEW YORK (AP) — U.S. stocks are drifting higher Thursday and adding to their records set a day before.
- The Long-Term Capital Management hedge fund almost collapsed, threatening to push its banking investors into bankruptcy.
- Journalist Charles Dow and his business partner, Edward Jones, established the Dow Jones Industrial Average in 1896, starting with 12 companies in the industrial sector.
The number of companies included in the index increased to 20 in 1916 and then to the current number, 30, in 1928. Since then, the Dow has remained among the most frequently discussed and commonly invest in amazon tracked equities indexes. Bitcoin was up 1.6% after the closing bell on Wall Street, near $107,040 at last check, after briefly topping $109,000 for a fresh record high. Stocks were lower Wednesday morning as Republicans in Congress tried to advance Trump’s tax bill.
Currency Crisis
The ratio of federal debt to gross domestic product, or the total value of goods and services produced in the economy, was 123% in 2024, up from 104% in 2017, according to the Treasury Department. While the 20-year Treasury note usually garners less attention than the 10-year or 30-year notes, all eyes have been on investors’ perception of Treasuries since Moody’s on Friday downgraded US government debt. While the Dow is widely followed, some critics argue its limitations. It comprises only 30 large-cap companies, which may not fully represent the overall U.S. economy. Many prefer the S&P 500, a broader index with 500 companies, as a more comprehensive economic indicator.
That could be an encouraging signal for the broader economy, as worries have risen about whether U.S. households can keep up with still-high inflation and more expensive credit-card payments. We’ve included a few key shocks to the stock markets along these timelines in addition to the presidents who were in office. Admittedly the steady hands of the Federal Reserve chairs during those eras likely had greater sway over the success of the markets than whoever was in the White House. Confidence that a recession could be averted continued into 2024. The Dow climbed above 38,000 in January 2024 and reached 40,000 by May.
A string of worse-than-expected reports on inflation at the start of the year had put the potential for such cuts in jeopardy, but some more encouraging data has since arrived. The Dow Jones industrial average finished above 40,000 for the first time on Friday afternoon, doubling where the index hit shortly after Donald Trump became the 45th president. Given its large-cap focus, the roster of companies included in the Dow fails to include companies of other sizes. Many market observers think the S&P 500 is a much better representation of the economy, as it includes 500 companies and draws more widely from just2trade broker review different sectors. These changes are not done often to ensure the index’s stability and continuity. It hit an all-time high of 34,200.67 points on Apr. 16, 2021.
As stablecoin adoption accelerates, investors should brace for a potentially steeper yield curve and boosted T-bill supply. Previously, the Dow had fallen from 11,723 in January 2000 to 9,389 in March 2001, dropping 20% (from 20,520 to 16,434 points, inflation-adjusted). 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.
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The Dow suffered a market correction between August 2015 and April 19, 2016, leading to a 2016 downturn. It began on Jan. 4, when the Dow closed 160 points lower as investors worried about a slowdown in China’s economic growth. Wall Street is keeping a close eye on Trump’s giant tax bill, as Republicans try to appease all factions of their splintered caucus.
What Is the Dow Jones Industrial Average?
Since its inception just before the onset of the 20th century, the DJIA has remained one of the most frequently discussed and commonly tracked equities indexes. A November streak occurred after Donald Trump’s presidential win on Nov. 8. Traders were confident in a business-friendly Republican president.
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Given its exclusively large-cap focus, the roster of companies included in the Dow fails to include companies of other sizes. Many market observers believe that the S&P 500 is a better representation of the economy, as it includes 500 companies rather than just 30. It hit an all-time high of 34,200.67 points on April 16, 2021.
JPMorgan’s Dimon sees ‘extraordinary amount of complacency’ as markets recover from tariff shock
On Feb. 8, it entered a market correction when it fell 1,032.89 points to 23,860.46. It hit two of them in the first few weeks in January, closing above 25,000 on Jan. 4. The index breached 26,000 on Jan. 17, then continued on to set 15 closing records in the rest of 2018. In 2019, the Dow hit two milestones and set 22 record closes. On July 3, the Dow hit a new high when the Trump administration announced it would resume trade negotiations with China, averting additional tariffs (taxes on imports). The one before that came on the final trading day of 2021, when Dow closed at 36,488.63 on Dec. 29, 2021, smashing the record it set on Nov. 8, 2021.
The yield on the 10-year Treasury note on Wednesday rose to 4.59% to hit its highest level since February and the yield on the 30-year Treasury rose above 5% to hit its highest level since 2023. The Treasury sold $16 billion worth of 20-year bonds, and the auction settled with a 20-year Treasury yield above 5%, signaling investors are demanding higher rates to hold US debt. The auction settled with a high yield of 5.047% compared to 4.83% at the last 20-year auction, in February. Investing directly in the Dow isn’t possible, but investors can gain exposure to its performance through index funds or exchange-traded funds (ETFs) like the SPDR Dow Jones Industrial Average ETF Trust (DIA). Since the Great Depression, 2007 to 2008 has been the most dramatic period of collapse for the DJIA. The market fell more than 50% in just a year and a half, due to the subprime mortgage and credit crisis that kicked off the Great Recession.