Wall Street ended the trading week struggling to come out of the deep technology led selloff earlier in the week, which pushed most of the Magnificent Seven names and some of the top tech companies in the red, despite positive Q4 earnings. The Dow Jones, however, managed to rally on Friday and reached the 50,000 level for the first time, lifted by Nvidia, which pushed other chip stocks higher.
On the economic side, the U.S. private sector added only 22K jobs in January, compared to the 45K expected, according to ADP. Also, U.S employers announced 108K job cuts in January, which was the highest for the month since 2009 and the highest monthly total since Oct. 2025.
For the week, the S&P dipped 0.10%, while the Nasdaq Composite fell 1.8%, and the Dow added 2.5%.
Future Wealth’s View
In our article on May 30, 2021 titled “Dow Jones Industrial Average celebrates 125 years”, we had stated that “One cannot but be in awe of the creation of the DJIA and the wealth that it has produced to millions of investors since its inception”. Since that day in May 1896 when the Dow closed for the first time at 40.96, value of DJIA has since grown with the US economy climbing above 100 in 1906, topping 1,000 in 1972 and crossing 10,000 in 1999 posting an average return of 7.69% since its inception. Over the last 20 years, returns on the DJIA have accelerated, producing an average return of 10.5%. But the road to 50,000 has not been without bumps. Most notably, the wreckage of the 2007-09 recession saw the Dow drop below 6600. But, the American economy has since zoomed past its rich counterparts to become far larger than that of the European Union.
In 2017, Warren Buffett predicted that he expects the DJIA to hit 1 million while immediately confessing that he doesn’t expect to be around to take a victory lap on his prediction. It took the Dow 54 years to go from 1,000 in 1972 to 50,000 in 2026. While it is impractical to expect a similar appreciation of ~10% annually in the next 45 years that will put the Dow at 1,000,000 by 2071, the fundamental notion of a 1 million DJIA cannot be questioned. Unfortunately, many of us along with Warren Buffett may not be around to see it.