The stock market speculators are having the best of times, as the Dow Jones Industrial Average hit the 20,000 point milestone for the first time.
The US premier stock index the Dow Jones Industrial Average hit the 20,000 point milestone for the first time on hopes US President Donald Trump’s administration will boost infrastructure spending.
The index came close to reaching the historical high on January 6, as investors were inspired by pro-growth policies and tax cuts from Trump.
“A seminal moment. It is just a number but it is a big number, it is certainly a flashy number,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York, as quoted by Reuters.
“There is a real belief that Trump is real, he has been extremely active these first couple of days of the presidency and a change may happen faster than people had thought,” he added.
The new record sees the Dow up 1,667 points since Trump’s victory in November. Wall Street expects President Trump to slash taxes, boost investment in US industry and cut regulation.
The surge in US stocks was preceded by Trump’s signing of two executive orders to back the construction of the Keystone XL and Dakota Access oil pipelines, rolling back President Barack Obama’s pivot to renewable energy.
“It’s time dust off those Dow 20k hats again, because the Trump rally is well and truly back on,” said Neil Wilson, senior market analyst at ETX Capital before the opening bell.
“We are clearly seeing a pro-business administration that is minded to action,” Wilson added.
Dow clambers above 20,000 — marks 2nd-fastest run to a milestone in history
The Dow Jones Industrial Average on Wednesday closed above the psychologically significant threshold of 20,000. Finishing at the level represents a milestone for the blue-chip gauge and highlights a relatively speedy path higher for the stock market in the wake of Donald Trump’s election win in November.
The Dow DJIA, +0.78% is up about 9.5% since Trump’s Nov. 8 election victory, the S&P 500 index SPX, +0.80% has gained nearly 7%, while the Nasdaq Composite Index COMP, +0.99% has advanced roughly 9% during that period.
The equity rally is supported by expectations that Trump will unleash a raft of pro-business policies, including a rollback of regulations, tax cuts and fiscal spending. The gains for the Dow on Wednesday came after Trump signed executive orders on Tuesday to move forward with the construction of controversial infrastructure projects, Keystone XL and the Dakota Access pipelines, which offered a boost to stocks as it supported expectations that a ramp up in infrastructure spending—a boon for economic growth—would be one of the centerpieces of his administration.
Indeed, it looks like America is now poised to be great again. But, the resumption of the Dakota Pipeline project could be a thorny issue in the days to come.