The Dow Jones Industrial Average hit 20,000 in trading Wednesday, marking a historic high and continuing a giddy post-Trump run-up that has seen the major indexes break records almost every day since the election.
After weeks of coming tantalizingly close to the milestone marker, the 120-year-old index finally broke 20,000 as Donald Trump fired off a host of executive orders that indicated he was making good on many of his campaign promises.
Propelled mainly by the banking, investing, and construction sectors, the Dow’s recent rally mostly reflects investor enthusiasm that Trump will be good for business.
Trump met with union heads and automakers this week to push for more jobs and manufacturing in the U.S., approved the construction of two massive pipelines, and is expected to sign an executive order later on Wednesday to confirm his intent to build a wall along the nation’s border with Mexico.
“We are clearly seeing a pro-business administration that is minded to action,” ETX Capital’s Wilson told Reuters.
The Dow has had traders poised to pop champagne corks since early January as they watched the index tick to within 0.37 of a point of the elusive goal, reaching 19,999.63.
While breaking the 20,000 barrier is a psychological level for market watchers, changes in the Dow don’t mean what they used to.
“One hundred points today is one-half of one percent. In 1972 it was 10 percent,” said professor Jeremy Siegel, a professor of finance at the University of Pennsylvania.
Still, the Dow is up almost 15 percent from post-election lows, estimated Oanda market analyst Craig Erlam.
“It’s quite staggering when you consider that Trump was deemed the less desirable victor,” he said. “The gains have been broadly attributed to the promise of fiscal stimulus, although I do wonder if markets have perhaps got a little carried away — and whether Trump can live up to expectations.”
But he said that the lack of a big correction as of yet suggests that “it’s only a matter of time until we’re trading above” 20,000.
So far, the Trump effect continues.