Dow Jones 40,000 is a milestone investors have eyed for years. But now a handful of stocks are posed to make it a reality.
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Eight Dow stocks, including UnitedHealth (UNH), Boeing (BA) and Microsoft (MSFT), are each expected to add at least 150 Dow points in the next 12 months, says an Investor's Business Daily analysis of stocks from S&P Global Market Intelligence and MarketSurge. Those are the largest contributions predicted from any Dow stocks, analysts say.
Dow 40,000 would be just the latest punctuation on a big rally. "Markets are rallying with the S&P 500, Dow Jones Industrial Average and Nasdaq Composite indices all reaching all-time highs," said Jose Torres, senior economist at Interactive Brokers.
Dow 40,000 A Long Time Coming
All told, analysts actually think the Dow is going to blow way past Dow 40,000 in 12 months time. If all 30 stocks in the average do what's expected, the Dow will be worth 42,233.32 in 12 months. That's roughly 7% higher than it closed on Friday. But there are clearly some stocks pulling more than their fair share of weight.
The idea of Dow 40,000 started the minute the average closed at 30,000 back on November 2020. But talk about a rocky road.
The Covid outbreak, skyrocketing short-term interest rates and tech-stock crash delayed Dow 40K from happening. But now, it looks like just a matter of time. The Dow Jones Industrial Average is up nearly 5% this year.
UnitedHealth: The Top Dow Driver
Health care company, UnitedHealth, is the Dow stock analysts have the highest hopes for. Analysts suspect the stock will rally nearly 20% in the next 12 months.
If right, that would mean the stock will add nearly 642 Dow points to the average. That's more than any other stock in the index. And it's not just wild speculation. The company is expected to earn 27.79 a share in 2024. That's up nearly 11% from 2023. But the anticipated rally hasn't started yet. Shares of UnitedHealth are down 6% this year so far.
The same can't be said for Microsoft, another hopeful for a big Dow point contribution. Shares are already up 14% this year. And analysts think the AI giant's shares will gain another 9% in the next 12 months. If that's right, it would mean an addition of 245 Dow points.
Nothing Is For Sure, Though
With the Dow closing at 39,476 on Friday, it's not much of a stretch to call for 40,000. It's only 1.3% away. But disappointments happen.
Consider Boeing. The struggling aircraft maker is supposedly going to rally more than 34% in 12 months. And if that happens, it would add 425 points to the Dow, making it the No. 2 largest contributor. And yet, the shares are down more than 27% this year instead. Analysts think the company will swing to a profit in 2024, but last year was such a huge money-losing disappointment, who knows what's next?
But for now, analysts seem confident calling for Dow 40,000. And it's hard to dispute it.
Biggest Contributors To Dow 40,000
Based on analysts' 12-month forecasts
| Company | Ticker | Dow points gain expected | YTD expected % rally |
|---|
| UnitedHealth Group | (UNH) | 641.78 | 19.9% |
| Boeing | (BA) | 425.24 | 34.3% |
| McDonald's | (MCD) | 283.75 | 15.3% |
| Microsoft | (MSFT) | 245.48 | 8.7% |
| Amgen | (AMGN) | 182.21 | 10.1% |
| Apple | (AAPL) | 181.12 | 16.0% |
| Amazon.com | (AMZN) | 173.35 | 14.8% |
| Salesforce | (CRM) | 151.50 | 7.5% |
Sources: S&P Global Market Intelligence, IBD
FAQs
The stock market could hit a milestone if the Dow Jones Industrial Average reaches 40,000. However, even as stocks have climbed higher, investors are worried there could be a pullback, financial advisors say. They're not alone in those concerns.
Has the Dow Jones ever broken $40,000? ›
Thursday was a pretty good day for Wall Street — the Dow Jones Industrial Average is closing in on the 40,000 threshold for the first time in its 128-year history as markets rallied to new highs.
Will the Dow ever hit $50,000? ›
To reach 50,000, the Dow wouldn't even need to double — it would require a 31.6% gain from the 38,000 level. If the DJIA companies only earned the current 1.77% dividend yield, it would take 15.6 years for the index to reach the 50,000 mark.
How much has the stock market gained under Biden? ›
As for the stock market during Biden's tenure, it trended higher, but with significant volatility. The benchmark S&P 500 generated impressive returns of 28.7% in 2021 and 26.29% in 2023. Sandwiched in between was a bear market, as the S&P 500, at its low point, dropped 25% in 2022.
What is the Dow prediction for 2024? ›
The bank's analysts give a positive forecast for the Dow Jones exchange rate in 2024. In their opinion, index quotes will increase by 10% to $40,000 in 2024. If the US economy avoids recession, growth could reach up to 19%. This scenario is more likely due to cooling inflation and stable GDP growth.
How much does the Dow have to drop to suspend trading? ›
A cross-market trading halt can be triggered at three circuit breaker thresholds—7% (Level 1), 13% (Level 2), and 20% (Level 3).
What is the highest Dow in history? ›
Key Takeaways. The Dow Jones Industrial Average (DJIA) hit its record high on Feb. 23, 2024, reaching 39,282.28 points in intraday trading. The Dow's all-time high at market close stands at 39,131.53, reached the same day.
How much did Dow lose in Great Recession? ›
How Much Did the Stock Market Crash During the Great Recession? On Oct. 9, 2007, the Dow Jones Industrial Average closed at its pre-recession high of 14,164.53. By March 5, 2009, the index had fallen more than 50% to 6,594.44.
How much did the Dow drop during the Great Depression? ›
Effects of the 1929 Stock Market Crash: The Great Depression
Stock prices continued to drop through 1932 when the Dow Jones Industrial Average—a widely-used benchmark for blue-chip stocks in the United States—closed at 41.22, its lowest value of the 20th century, 89 percent below its peak.
What will the Dow be in 2027? ›
To some investors, this might seem unlikely. The Dow Jones Industrial Average, an index that has astonished with its ascent over the past decade, likely will continue to astonish through the 2020s, rising to 50,000 by 2027.
James Demmert, chief investment officer at Main Street Research, said he believes the S&P 500 could trade at 15,000 or higher within seven to 10 years, while the Dow could rise to 100,000, and the tech-heavy Nasdaq Composite could reach 50,000.
Will the Dow hit $37,000? ›
The Dow industrials surpassed the 37000 level intraday for the first time on record Wednesday. The blue-chip index hit its last thousand-point milestone, 36000, in November 2021.
What has Joe Biden done? ›
Top Accomplishments
- Lowering Costs of Families' Everyday Expenses.
- More People Are Working Than At Any Point in American History.
- Making More in America.
- Rescued the Economy and Changed the Course of the Pandemic.
- Rebuilding our Infrastructure.
- Historic Expansion of Benefits and Services for Toxic Exposed Veterans.
Presidents have very little impact on the stock market, but they still seem to get some credit when performance is good and more of the blame if markets are down. Typically, Congress and the Federal Reserve can play a bigger role in directly shaping markets, compared to the president.
How much has the stock market gone up since 1929? ›
Stock market returns since 1929
If you invested $100 in the S&P 500 at the beginning of 1929, you would have about $665,445.73 at the end of 2024, assuming you reinvested all dividends. This is a return on investment of 665,345.73%, or 9.68% per year.
What is the highest Dow closing price? ›
The Dow Jones Industrial Average (DJIA) hit its record high on Feb. 23, 2024, reaching 39,282.28 points in intraday trading. The Dow's all-time high at market close stands at 39,131.53, reached the same day.
Where will the Dow be in 2025 predictions? ›
Dow Jones index value stood at 38,460.92
According to the latest long-term forecast, Dow Jones value will hit 40000 by the middle of 2025 and then 50000 by the middle of 2028. Dow Jones will rise to 60000 within the year of 2032 and 70000 in 2035.
What is the highest value of the Dow Jones? ›
Records
| Category | All-time highs | All-time lows |
|---|
| Closing | 39,807.37 | Friday, July 8, 1932 |
| Intraday | 39,889.05 | Friday, July 8, 1932 |
The highest closing price for the Dow Jones Industrial Average (DJI) all-time was $39,807.37, on March 28. The latest price is $37,885.92.
