CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Dow Jones smashes all-time highs on recovery hopes

Blue-chip barometer Dow Jones Industrial Average hit multiple intraday highs amid a faster-than-expected reopening of the US economy and growing inflation worries.

  • Dow Jones Industrial Average (DJIA) climbs 0.9% to hit new all-time high on Friday
  • The index’s biggest losers included Apple, Salesforce, Nike, and Visa
  • Investors continued rotating into value shares and selling off tech plays
  • Trade the Dow Jones with an IG account

Which stocks led the Dow higher?

The benchmark Dow Jones Industrial Average jumped 0.9% or nearly 300 points on Friday (12 March 2021) to close at 32,778.64, setting another fresh record. About 348.3 million shares changed hands.

DJIA, which measures the performance of 30 blue-chip stocks listed in the US, advanced about 4.1% from Monday to Friday, marking its biggest weekly gain since November 2020.

Reuters noted that the widely watched stock market index was powering to notch an intraday record high every day of last week.

Aerospace giant Boeing Co saw its shares soaring 6.8% on the day to close Friday at US$269.19 per share, delivering the biggest boost to Dow Jones. Other stocks driving major gains on the index included Caterpillar Inc, JPMorgan Chase & Co, Goldman Sachs Group, and Walgreens Boots Alliance.

On the other hand, the biggest loser on the benchmark gauge last Friday was Salesforce.Com Inc, which slid 1.8% day-on-day to US$212.21. Other stocks that dragged on the index included Nike Inc with a 0.6% decline and Visa Inc with a 0.8% drop.

Rotation into value shares continues

Investors are piling into cyclical and underpriced value stocks that could potentially benefit from a recovery of the US economy, Reuters reported.

However, while Dow Jones enjoyed advances, the tech-heavy Nasdaq tumbled. This came as high-growth technology companies started to lose favour with investors, as inflation fears were revived by rising bond yields.

With the new US$1.9 trillion stimulus package, the US economy could expand 7-9% in 2021 and pressure interest rates higher, said hedge fund Great Hill Capital LLC’s chairman Thomas Hayes.

‘That’s why you’re seeing rates rise today because the reopening is happening faster and stronger than anticipated. And that’s when value and cyclicals and economically sensitive stocks outperform,’ Hayes said on Friday.

The high-flying but yield-sensitive group of stocks - including Facebook Inc, Tesla Inc, as well as Dow Jones constituents Apple Inc and Microsoft Corp - are perceived as the most vulnerable to rising borrowing rates.

Apple shares dropped 0.8% to finish at US$121.03 on Friday, while Microsoft’s share price lost 0.6% to end at US$235.75.

Investors are ‘a little nervous about current yield levels, which is affecting tech stocks’, said Crossmark Global Investments chief market strategist Victoria Fernandez.

Nordea Investment Funds strategist Sebastien Galy noted that growth stocks maintained a high sensitivity to interest rates, ‘which continues to suggest that they are quite overvalued’.

Trade indices with IG

Are you feeling bullish or bearish on the Dow Jones?

Either way you can buy (long) or sell (short) the asset using IG's industry-leading trading platform, in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Wall Street> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.