The Dow Jones Industrial Average just topped 40,000 for the first time, the latest pop in what’s been a surprisingly good year for Wall Street, The Associated Press reports.
But just like New Year’s represents an arbitrary point in time in the Earth’s revolution around the sun, such milestones for the Dow don’t mean that much inherently.
For one, with just 30 companies, the Dow represents a tiny slice of Corporate America. For another, almost no one’s 401(k) account sees its performance depend on the Dow, which has become more of a relic used for historical comparisons.
It took about three and a half years to make the leap from 30,000 points, which the Dow first crossed in November 2020. Companies are now in the midst of reporting their best profit growth in nearly two years, and the economy has managed to avoid a recession—at least so far.
