Skip to Content
Global News Select

Dow Industrials on Track for New High

By Caitlin Ostroff and Karen Langley 

The Dow Jones Industrial Average rose toward a fresh record Wednesday as concern about the potential for a rise in interest rates eased.

The blue-chip average rose 0.5%, or about 166 points, putting it on pace to eclipse its closing high set in April. The S&P 500 rose 0.4%, while the tech-heavy Nasdaq Composite added 0.1% after a sharp decline Tuesday.

Stocks resumed their upward trajectory after Treasury Secretary Janet Yellen walked back comments that interest rates might need to rise to keep the economy from overheating.

She clarified after markets closed Tuesday that she was neither predicting nor recommending that the Federal Reserve raise rates. Inflation isn't likely to be a problem, and the Fed can handle it if it does become an issue, she said at The Wall Street Journal's CEO Council Summit.

"Today is a bit of a relief rally," said Edward Park, chief investment officer at Brooks Macdonald. "Markets are grinding higher and they are grinding higher on a relative basis because equities remain the most attractive."

Money managers said inflation and the Fed's potential response may become a bigger concern in the second half of the year. Stocks are likely to continue to rally as long as people agree with the Fed's view that the recent climb in inflation will prove to be fleeting, they said.

"Either the Fed is correct or they are very, very wrong," said Salman Ahmed, global head of macro at Fidelity International. "It is entirely possible that the market oscillates between these two scenarios" for the next few months," he added.

U.S. stock indexes have notched numerous records in 2021 as the economy heals from the pandemic-induced slowdown and corporate profits beat expectations.

Recent data from the Commerce Department showed that robust growth in the first quarter returned the U.S. economy to just below its pre-pandemic size.

That acceleration can be seen in corporate profits. With about three-quarters of S&P 500 companies having reported, earnings are projected to have grown 48% in the first quarter from a year earlier, according to FactSet. That's a big improvement from the 16% growth analysts predicted at the end of December.

"It's hard for this market to stay down for any lengthy period of time given the enormity of positive economic data confirmed with tremendous earnings," said Hank Smith, head of investment strategy at Haverford Trust.

Earnings reports drove moves among individual stocks. Shares of Activision Blizzard gained 2.9% after the videogame publisher reported a higher first-quarter profit. T-Mobile US shares climbed 4.8% after the telecommunications company topped first-quarter revenue and earnings expectations.

General Motors shares rose 4% after the company said early Wednesday that it expects to hit the high end of its estimated 2021 profit range, with strong pricing and brisk new-vehicle demand helping offset the financial impact of a chip shortage.

Shares of Peloton Interactive slid 15% after the company agreed to recall its treadmills and its CEO apologized for an initial refusal to comply with federal regulators.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note edged down to 1.585%, from 1.591% Tuesday. Bond yields fall as prices rise.

Overseas, the pan-continental Stoxx Europe 600 rallied 1.8%. In Hong Kong, the Hang Seng Index fell 0.5%. Markets in Japan, South Korea and mainland China were closed for public holidays.

Write to Caitlin Ostroff at and Karen Langley at


(END) Dow Jones Newswires

May 05, 2021 14:43 ET (18:43 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.