Thursday saw losses across Wall Street’s main indices after a turbulent session, during which the Dow Jones briefly surpassed the historic 40,000 mark. However, it closed with a slight loss of 0.1% at 39,869 points. The S&P 500 also dipped by 0.21% to 5,297 points, while the Nasdaq fell by 0.26% to 16,698 points.

Despite briefly nearing the 40,000 milestone earlier this year, the Dow experienced a setback in April due to concerns over high interest rates. However, a rally in May, buoyed by strong corporate earnings and moderate inflation, reignited optimism.

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The S&P 500 hit a new intraday high, exceeding 5,300 points for the first time. Year-to-date, the benchmark index has risen by 11%, matching the Nasdaq’s performance, while the Dow Jones has strengthened by 6%.

John Lynch of Comerica Wealth Management highlighted the Dow’s achievement as a testament to capital strength, innovation, and economic resilience. Expectations of a Fed rate cut, fueled by new US inflation data and optimism about artificial intelligence, contributed to the Dow’s momentum. The first rate cut is now anticipated in September, according to CME Group’s FedWatch.

However, three Fed officials, including Loretta Mester, John Williams, and Thomas Barkin, cautioned against premature rate cuts, advocating for sustained high rates until inflation shows clearer signs of moderation.