Dow Hits Record-Breaking 25,000 — Here's What It Means

NEW YORK, NY — As much of the Northeast was battered by an ominous-sounding bomb cyclone and frigid temperatures seize the Midwest, the stock market showed no signs of cooling Thursday. The Dow Jones Industrial average shot passed the 25,000 point milestone, continuing its record-breaking trend from 2017.

Though the Dow is not favored by those who watch the markets most closely — they tend to prefer measures like the S&P 500 — it has become the most widely cited measure of stock market vitality. When Dow broke 20,000 for the first time in January 2017, there was much celebration then as well.

Stocks appeared to rise in response to early analysis from ADP and Moody's Analytics that found the economy added an impressive 250,000 jobs in December.

"Dow 25,000 is a mere 4.2% advance from 24,000 at the end of November," said Greg McBride, chief financial analyst at Bankrate.com. "With the positive fundamentals – an expanding economy, continued job growth, still low interest rates and tax reform that promises to boost corporate earnings – it's no surprise to see the market continuing to climb."

Some argue that despite the arbitrary nature of milestones like 20,000 and 25,000, the psychological impacts of reaching these highs are real. But it's important to remember that exuberance in financial markets does not always last.

"Just remember, markets go the other way too from time to time, and [it's] been nearly two years since any notable pullback," McBride said. "Don’t be concerned – or surprised – when that happens, as long as the economic and earnings fundamentals remain positive."

On Twitter, President Trump was less cautious about celebrating the high water mark.

"Dow just crashes through 25,000," he said. "Congrats! Big cuts in unnecessary regulations continuing."

Overall, the economy remains strong and unemployment is generally quite low. But the Dow just may not be the best measure of that fact.

"The S&P 500 is a much better market indicator, and it recently crossed 2700 for the first time. But that just doesn’t have the same ring to it," said McBride.

Photo by Spencer Platt/Getty Images