The Dow stock index briefly topped the 40,000 line for the first time ever on Thursday amid growing optimism about the solid U.S. economy as recent data suggested stubborn inflation may ease and the Federal Reserve could begin cutting key interest rates in the fall.
But the buying lost steam after the 30-issue Dow Jones Industrial Average hit an intraday record at 40,051.05, also on the back of strong corporate earnings reports.
The index finished at 39,869.38, down 38.62 points, or 0.1 percent, from the closing record of 39,908.00 marked Wednesday. The tech-heavy Nasdaq Composite Index shed 44.07 points, or 0.26 percent, to 16,698.32.
U.S. President Joe Biden described the index's surge above the 40,000 threshold as "another sign of confidence in America's economy."
The consumer price index for April, released Wednesday, showed an increase of 3.4 percent compared to a year earlier, suggesting the first slowing of inflation in three months.
Recent employment data also signaled normalization in the labor market, which has been regarded by many analysts as overheated. The change encourages investors to expect that the Fed could decide to cut borrowing costs in September from the current level, a 23-year high.
Overall, the Dow index has been on an upward trend since it fell below 6,600 in March 2009 amid the financial crisis caused by the collapse of the U.S. investment bank Lehman Brothers Holdings Inc. the year before.
After suffering a steep fall in March 2020 due to the novel coronavirus pandemic, it bounced back to surpass 30,000 in November of that year after the country's central bank eased its monetary policy.
The stock index did not show remarkable increases after the Fed began raising the federal funds rate in 2022 to fight inflation, but its recent gains reflect solid earnings at major U.S. corporations, including those involved in information technology and artificial intelligence.
