By David Uberti

The Dow Jones Industrial Average hit 50000 for the first time on Friday, the latest milestone in a yearslong run in which the U.S. economy has muscled past its rich peers and snapped up investment the world over.

Since the blue-chip index plunged below 6600 during the depths of the 2007-09 recession, it has effectively moved in one direction on the flickering screens of Wall Street: up and to the right. Bouts of trading turmoil that periodically upended the Dow now seem like speed bumps in America's rearview mirror.

An era of ultralow interest rates helped spur the longest postwar expansion in U.S. history and pump Silicon Valley into a global juggernaut. Washington threw massive amounts of money into the financial system and economy to propel a rapid rebound from the pandemic. An artificial-intelligence boom has more recently juiced the stock market at a historic scale.

"We don't think that the U.S. opportunity is over by any stretch of the imagination," said Chris Hyzy, chief investment officer of Bank of America Private Bank and Merrill.

The big wild card in 2026 is how a top-heavy market reacts to AI-inspired volatility, from fears that the bubble will burst to warnings that new technologies could upend entire industries. In recent days, add-ons to Anthropic's Claude product sparked a selloff stretching from software providers to legal-services companies, eventually sweeping up AI giants.

"Are [investors] going to run and hide," Hyzy said, "or view that as a buying opportunity?"

In recent years, at least, buying the dip has largely proved to be a safe bet.

Stocks' gravity-defying rally has pushed companies' valuations to previously unfathomable levels and minted a class of millionaires whose spending has helped keep the economy humming. A new generation of risk-taking investors increasingly toes the line between trading and gambling.

The Dow's 30 firms -- established companies from manufacturing to media -- haven't captured the full weight of those forces. Since the index first hit 25000 in early 2018, mainstays including Goldman Sachs, Apple and Caterpillar drove an outsize portion of gains. Boeing and 3M lagged behind the pack. Nvidia replaced Intel, in a sign of how AI is redrawing the global financial map.

Even though Nvidia, Microsoft and International Business Machines have helped drive the Dow higher, its long rally lagged behind the tech-focused Nasdaq composite and increasingly AI-heavy S&P 500. But the blue-chip index has recently outpaced its counterparts as investors rotated holdings into banks, industrial firms and other sectors more directly linked to the real economy.

The Dow's climb in recent months marks a U-turn from earlier last year, when President Trump's tariff ramp-up sparked chaos. Shares in Chevron, Nike and others plunged in April, dragging the index 16% below its post-inauguration highs.

Since then, many of Wall Street's worst fears of the tariff onslaught haven't materialized, thanks to an expanding array of trade deals and exceptions for key products and materials. As U.S. growth keeps powering ahead, investors are hopeful that the Federal Reserve will continue cutting interest rates this year despite elevated inflation.

Still, as the Dow charts a course to 100000, there are warning lights in some corners of the economy. Price pressures continue to squeeze millions of lower- and middle-income Americans. U.S. hiring has been sluggish, and even Fed Chair Jerome Powell has cautioned that official figures may be overstating the labor market's strength.

At the same time, economic growth and expansionary government policies overseas have helped international markets outperform their richly valued American counterparts in recent months. That could mean more pressure ahead for some of the stocks that have pushed the Dow higher.

Write to David Uberti at david.uberti@wsj.com

(END) Dow Jones Newswires

February 06, 2026 14:24 ET (19:24 GMT)

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