The Dow Jones Industrial Average rose more than 500 points on Tuesday, closing above 37,000 for the first time in its 132-year history. The milestone was spurred by bullish economic sentiment due to the effectiveness of pandemic vaccines and strong projections for the upcoming earnings season.
The Dow rallied from the flat open, with strong gains in blue-chip giants such as Boeing, Dow, and Apple, to close above 37,000. Apple’s surging stock price played a major role in the Dow’s latest milestone, rising nearly 4% following a strong earnings report.
The broader S&P 500 and the tech-heavy Nasdaq Composite indexes followed the Dow’s lead, closing higher by 1.6% and 2.3%, respectively. All 11 sectors of the S&P 500 index finished higher on Tuesday with the energy sector leading the way, up 2.8%, and the real estate sector lagging behind, up just 0.2%.
The bullish sentiment Tuesday was driven in part by optimism about the economic recovery from the coronavirus pandemic. U.S. and global vaccine efforts and the expectation of strong corporate profits have propelled the Dow to these record heights. Analysts also believe that the U.S. economy will benefit from President Joe Biden’s proposed $1.9 trillion stimulus package and measures proposed in his upcoming infrastructure plan.
The Dow’s latest record-setting performance comes amid a strong start to 2021, which has seen the Dow gain over 8% in the past four weeks. With more upbeat economic news on the horizon, the Dow is expected to continue its ascent in the coming weeks.
Investors will be looking ahead to the upcoming quarterly earnings season and further vaccine rollout, keeping an eye out for potential pitfalls. Despite the optimism, some analysts have warned of a potential market bubble, urging investors to remain cautious despite the Dow’s run to new heights.