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Dow closes above 40,000 for first time, notching new milestone
The Dow closed above 40,000 points for the first time on Friday in a quiet day on Wall Street, with investors taking cheer in strong corporate profits and signs that inflation is cooling.
The 128-year-old blue-chip index added 134 points, up 0.3%, to close at a record high of 40,004. The broader S&P 500 index edged up 0.1% and the tech-heavy Nasdaq ended essentially flat. All three financial markets climbed to new heights this week after the Consumer Price Index rose at an annual rate of 3.4% in April, in line with analyst forecasts.
Although inflation continues to run considerably hotter than the Federal Reserve’s 2% target, the latest CPI data suggests that prices around the U.S. are moderating after rising much faster than expected earlier this year. That is rekindling hopes the Federal Reserve could soon act to cut its benchmark interest rate, which would give a further lift to financial markets as well as lower borrowing costs for consumers and businesses.
With the U.S. economy seemingly on track for a soft landing, many traders expect the U.S. central bank to trim the federal funds rate — now at its highest level in more than two decades — twice this year.
While major markets have continued levitating, so-called meme stocks are fizzling after soaring earlier in the week. Shares of GameStop, a money-losing video game retailer that has been embraced by retail investors, fell nearly 20% on Friday after the company said it expects to report a loss of $27 million to $37 million for the three months through May 4. It also said it could sell up to 45 million shares of stock in order to raise cash.
The stock had topped $64 on Tuesday after Keith Gill, a popular online trader known on social media as “Roaring Kitty,” resurfaced on X (formerly Twitter) after a three-year hiatus.
—The Associated Press contributed to this report.
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