From Nasdaq: 2024-05-17 11:10:00

The Dow Jones Industrial Average hit 40,000 for the first time fueled by strong corporate earnings and expectations of rate cuts. The SPDR Dow Jones Industrial Average ETF (DIA) has gained 6.4% this year. Top performers in the ETF portfolio include American Express, Walmart, Amazon, Goldman Sachs, and Merck.

The blue-chip index has been outperforming with a broadening rally, including cyclical stocks, banks, and small-caps showing positive trends. Strong earnings reports and guidance from mega-cap stocks are boosting the index. Amazon’s addition to the index in February also contributed to the index’s rise.

Inflation in the US eased, sparking predictions of Fed rate cuts by September. Lower rates benefit stocks by reducing borrowing costs and making equities more attractive than fixed-income investments. CME FedWatch Tool shows around 70% of traders expect a rate cut by September, rising from previous weeks.

The SPDR Dow Jones Industrial Average ETF (DIA) is a leading ETF in the large-cap space with a $33.3 billion AUM and tracks the Dow Jones Index. Key sectors in the ETF are financials, technology, healthcare, consumer discretionary, and industrials. The ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy).

Top-performing stocks in the DIA portfolio include American Express, Walmart, Amazon, Goldman Sachs, and Merck. Each company has seen significant gains this year with expectations of earnings growth. American Express, Walmart, Amazon, and Merck have a Zacks Rank #3 (Hold) while Goldman Sachs is a Zacks Rank #1 (Strong Buy).



Read more at Nasdaq: 5 Stocks Powering the Dow ETF Year to Date