Dow heads for a record as traders look beyond tech to blue chips
The Dow Jones Industrial Average is on pace to close at an all-time high on Friday, as investors pile into US equities on the back of strong corporate earnings and ebbing trade and geopolitical fears.
The 30-member blue-chip index - comprised of household names such as Goldman Sachs Group Inc., McDonald’s Corp. and JPMorgan Chase & Co. - was up 0.4% to 45,098.99 at 9:46 a.m. in New York, marking a 20% rebound from its tariff-fueled low on April 8. If that holds through the end of the session, the Dow will notch its first record close since Dec. 4, when it finished at 45,014.04.
The sharp recovery from the depths of April’s trade-related selloff was led by Goldman Sachs, Microsoft Corp. and Caterpillar Inc., each of which has gained more than 45% over that stretch.
“Market sentiment is riding on expectation of continued margin expansion,” said Brad Conger, chief investment officer at Hirtle Callaghan. “And the Dow represents many obvious names that are ideal for retail chasing. Who can go wrong owning JPMorgan Chase?”
The outlook for industries that are closely tied to economic growth has improved as fears of President Donald Trump’s tariffs plunging the US into a recession recede, boosting stocks in the financial, manufacturing, transport, consumer staples and basic materials sectors. At the same time, corporate earnings have held up well, lifting investor sentiment.
The Dow’s price-weighted structure and its focus on old-economy companies means technology makes up a smaller part in the index than in the S&P 500, which is market cap-weighted. Financials hold the highest Dow weighting - about 27% - followed by tech at 20% and industrials at 14%. By comparison, the tech sector accounts for 34% of the S&P 500.
The jump to a record by the Dow came later than a similar move in the S&P 500 Index, which has been clocking new highs since late June, and the tech-heavy Nasdaq 100 Index. The S&P 500 is trading flat Friday, and the tech-heavy Nasdaq 100 Index is down 0.3%.
Broadening Rally
Of the three major US equity benchmarks, the Dow was least affected by the tariff-related turmoil of March and early April. It sank about 16% from its December high to the April trough, while the S&P 500 tumbled 19% from its own record touched on Feb. 19, and the Nasdaq 100 retreated 23%.
To some market watchers, the Dow’s breakout to a record is an encouraging sign for the broader market, as it shows investors’ optimism has spread beyond technology.
“The S&P 500 hitting a new high is more important, but the Dow doing the same thing adds credibility to the S&P’s record,” said Sam Stovall, chief investment strategist at CFRA.
Tech stocks have been in the driver’s seat for the overall market in recent years, and after a short hiatus early in 2025, they have once again become the main engine driving US equities out of their trade-related slump. But market strategists have warned that unless other key parts of the market, such as banks and industrials, also join the rally the momentum could start to taper off.
The S&P 500 Equal Weighted Index, which is often seen as a better reflection of market participation than the regular S&P 500, hit its own record high in July.
Meanwhile, for the adherents of the Dow Theory’s century-old market wisdom, the focus turns the Dow Transportation Average. The theory posits that moves in the Dow Jones Industrial Average must be confirmed by transport stocks, and vice versa, to be sustained.
Despite some recent strength, the transport index is still languishing below it own all-time-high touched in November.