The Dow Jones industrial average on Tuesday topped 23,000 for the first time, crossing another milestone amid better-than-expected earnings reports and concerns that stocks are approaching another bubble.
The Dow finished above 22,000 for the first time on Aug. 2.
With its new record level, the blue chip index is now up 16 percent since the start of the year and about 26 percent since Election Day.
“It’s always hard to know why the stock market does what it does. But there are a few good explanations out there,” David Wessel, director of the Hutchins Center at the Brookings Institution and a contributing correspondent for The Wall Street Journal, told NPR’s David Greene last week.
“Corporate profits are strong,” Wessel added. “Interest rates are low, which is good for stock prices because investors are looking for someplace to put their money — they get a better return than in bonds or bank accounts.”
In an interview with NPR last week, Stanley Fischer, who recently stepped down as the Federal Reserve vice chairman, said that despite record highs in the stock market — boosted by the Fed’s low interest rates — he doesn’t see a bubble. “We don’t think we’re in a situation where we have an inflationary bubble or an unsustainable set of prices in the asset markets,” he said.
Analysts have said plans by President Trump and congressional leaders to cut corporate tax rates also have driven up the markets. On Monday, Trump and Senate Majority Leader Mitch McConnell said it might take longer than expected to pass the tax legislation.