Business
Commentary: The Dow just broke 50,000. Here’s what that means
The Dow Jones Industrial Average just crossed 50,000 points for the first time, but that doesn’t mean the economy is healthy
Round numbers always enchant humans, especially when they’re big round numbers.
So you’ll probably be reading and hearing a lot about how the Dow Jones Industrial Average crossed the 50,000-point threshold Friday for the first time.
Actually, “threshold” isn’t the right word. The mark’s significance is psychological, if that.
In real terms, nothing got triggered at that moment, which happened at about 2:27 p.m. Eastern time. No rules or regulations changed. In and of itself, it won’t create a jump-up in anyone’s personal net worth.
It’s doubtful that any trading algorithms kicked in, except those that might have been keyed to a sharp reversal of trading sentiment from earlier in the week, when it was pretty sour.
Still, the chances are that attention will be paid. The Dow gained 1,206.95 points or 2.47% Friday, closing at 50,115.67.
If you’re inclined to make a bet, you might put your money on the likelihood that President Trump or his minions will take this to mean the overall economy is firing on all cylinders, thanks to his policies. It doesn’t mean that.
So let’s dig a little deeper into the meaning of this particular round number. We can start by noting that the Dow not only doesn’t rank as a reliable picture of the U.S. economy, it doesn’t rank as a picture of the stock market as a whole. It’s a price-weighted average of only 30 stocks, with higher priced stocks having a bigger influence on the average, while the Standard & Poor’s 500 index tracks, well, 500, and the Nasdaq Composite more than 3,000. (Both those indices moved sharply higher Friday, too.)
Yet I confess I have a soft spot for the Dow. That dates from the 1980s, when it was treated as more of an economic bellwether than now, and I was the New York financial correspondent for The Times.
The Dow had been running up fairly smartly, and I pleaded with the business editor, the revered Paul Steiger, to rescind the rule mandating that I write a story on any day when the average moved 20 points or more. However, I got his agreement that the day it broke 2,000 points for the first time, I would write that story.
And I did! That day was Jan. 8, 1987.
“It’s a milestone because round numbers intrigue everyone,” Newton Zinder, chief market analyst for E.F. Hutton & Co., told me at the time.
William LeFevre, market strategist for the Hartford-based investment firm of Advest, added: “This will bring a lot of little investors into the market, because the publicity associated with it focuses a lot of attention on the Dow.”
But as I observed then, hullabaloo over “milestone” numbers is typically misplaced. The Dow’s first close over 1,000 was greeted with great fanfare on Nov. 14, 1972, when investors and Wall Street professionals read it as a sign that explosive economic growth lay in store for 1973.
Market analysts were nearly unanimous in forecasting that the Dow could rise an additional 150 to 300 points within two years.
Sadly, no. It took nearly 10 years, or until October, 1982, for the Dow to reach even 1,100.
Any optimism the 2,000-point mark inspired also proved to be misplaced. The Dow suffered a major crash of 508 points on Oct. 19, 1987, only nine months later.
Comparing the trajectories of the U.S. economy and the stock market over the four decades since Dow 2,000 is an interesting exercise. In the first quarter of 1987, U.S. gross domestic product was $4.72 trillion, or $13.77 trillion in today’s dollars.
Today it’s $31.1 trillion. So the U.S. economy has grown by 558% in nominal terms, or 125% adjusted for inflation.
In that same period, the Dow Industrial average has grown by 2,400% in real terms, or an inflation-adjusted 758%. The S&P 500 has grown by 2,588% in nominal terms, or an inflation-adjusted 821%.
Dissertations can be written about what these comparative numbers say about, first, the long-term strength of the U.S. economy and, second, whether its majestic growth in wealth is distributed fairly. But they certainly document that corporate and capital valuations have handily outstripped economic growth generally. The bottom line is that few American households feel as if their wealth has grown by 2,400% in the last 39 years, or even 758%.
As for whether it’s possible to read conclusions about the economy in the Dow Industrial figures, it’s hard to discern a clear pattern. For one thing, the 30 components change over time, as the average’s owner, a joint venture between Standard & Poor’s, and the financial services company CME Group.
There’s a bit of gamesmanship involved in these decisions — the most recent change, in November 2024, substituted chipmaker Nvidia for chipmaker Intel. The change kept the average consonant with the evolution of the semiconductor market; Intel shares had lost half their value in 2024, while Nvidia had more than doubled, riding the wave of its dominance over the AI chip market.
Nvidia validated the average-makers’ instincts: Its gain of 7.78% Friday powered much of the average’s advance. Big percentage gainers included Caterpillar (up 7.06%), Goldman Sachs (4.31%), JPMorgan Chase (3.95%) and Walmart (3.34%).
Somewhere in there may lie truths about the semiconductor, banking, retail and manufacturing sectors, but one day’s results probably don’t tell the whole story. Nvidia’s gain came on the heels of a nasty week — the stock had lost 10% of its value since Jan. 29.
History tells us that its unwise to take solid conclusions from short-term action in the Dow or any other index. Friday’s gains could mark a lasting recovery from the market meltdown of recent weeks, or could be what market followers call a “dead-cat bounce,” and the cat is still dead.
For the moment, still, the Dow had a very nice day. That doesn’t mean the euphoria will last.
Airbnb unveiled a new set of services for guests on Wednesday, adding car rentals, airport pickup and grocery delivery to its online marketplace that connects travelers with local hosts.
Customers can now get groceries delivered to their Airbnb through a partnership with Instacart and have a driver meet them at the airport with Airbnb’s Welcome Pickups. The app is also offering luggage storage in partnership with Bounce and will add in-app car rentals later this summer.
At the same time, Airbnb is ramping up its use of AI by adding AI-powered review summaries and lodging comparisons, the company said.
The company has been expanding beyond lodging since last year, when it introduced Airbnb Experiences and Services, giving guests the option to book private tours and chef-cooked meals through the app.
In an earnings call earlier this month, the company’s chief executive, Brian Chesky, said the company is at “the very, very beginning of how AI is going to change how we all do our jobs.”
The changes are coming in time for the 2026 FIFA World Cup, which will take place in 16 cities across the U.S., Mexico and Canada. The company said its offering exclusive World Cup experiences, such as watch parties and access to stadiums.
“In terms of what we’ve seen in cumulative bookings heading into the event, the World Cup is slated to be the largest event in Airbnb’s history,” said the company’s chief financial officer, Ellie Mertz, on the earnings call.
Airbnb gained popularity for offering travelers unique and homey stays on other people’s property, but it added boutique hotel bookings to its platform late last year. The move had some customers questioning if the app was straying too far from its original purpose.
In its announcement this week, the company said it is partnering with more independent hotels in 20 top destinations, including New York, London and Singapore. On the earnings call, Chesky said hotels on Airbnb could become a multibillion-dollar revenue business.
The San Francisco-based company was founded in 2007 and gave homeowners the opportunity to earn money by renting out their space to travelers seeking something different from a hotel. Airbnb bookings can range from private bedrooms in a shared home to luxury mansions and yachts.
The company’s revenue grew 18% year over year to $2.7 billion in the first quarter, while net income increased slightly to $160 million. Airbnb’s new services and offerings could transform it from a home-sharing platform to a holistic travel marketplace, analysts said.
Shares of the company have increased by 14% over the past six months and fell by less than 1% on Thursday.
Elon Musk wants to take investors on a ride to the moon — and beyond.
His pioneering rocket company SpaceX filed Wednesday for what’s expected to be the largest initial public offering in history, potentially raising at least $75 billion and valuing the company at as much as $2 trillion.
The registration statement with the Securities and Exchange Commission for an expected public offering next month explicitly sets aside stocks for retail investors, though the exact number will be spelled out in a later filing, as will the offering price and company valuation.
Interest in the stock offering is expected to be high despite the billionaire’s controversial politics, including his involvement last year with the Department of Government Efficiency, the makeshift cost-cutting effort that resulted in the loss of hundreds of thousands of government jobs.
“Potential investors are probably just as polarized as the electorate is too, given his dabbling in politics,” said Carol Schleif, chief market strategist for BMO Private Wealth. “But it’s not just the SpaceX IPO per se, it’s a bigger, broader excitement among investors for space investment in general.”
Investor interest was piqued by the Artemis II moon mission this year that SpaceX did not participate in, she said. However, the company is expected to play a larger role in future missions that take astronauts to the moon..
Ultimately, Musk, 54, wants to establish a colony on Mars but those plans have been set on the back burner, with NASA now focusing on moon missions.
Musk will remain the company’s chief executive and chairman. Under a dual-class stock structure as a holder of special Class B shares he will be able to control the election of directors, the filing says.
The IPO is expected to be at least twice as large as the current record holder: Saudi Aramco, the state-controlled national oil and gas company of Saudi Arabia, which raised nearly $30 billion in 2019.
Nearly two dozen banks will be underwriting the IPO and offering shares to investors, including Goldman Sachs, Bank of America and Citigroup.
Founded in 2002 in El Segundo, SpaceX has revolutionized the aerospace industry by developing the reusable Falcon 9 rocket that has radically lowered launch costs.
The company moved its headquarters from Hawthorne to Texas in 2024. However, SpaceX retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
Scores of former SpaceX employees have launched startups in Southern California, including rocket company Relativity Space, hypersonic missile startup Castelion and satellite manufacturer Apex Space.
Since developing its reusable rocket technology, SpaceX has established its Starlink network as the leading satellite-based broadband internet service. It also is moving into satellite-based cellular service and this year merged with Musk’s xAi artificial intelligence company that also included his X social network.
Marco Cáceres, an aerospace analyst at Teal Group, said that the advantage of going public for SpaceX lies in the IPO’s ability to raise a large amount of capital quickly to complete development of its Starship rocket.
“It is going to dominate the market even more than the Falcon 9 is dominating the market now,” he said. “That’s going to be ultimately what’s going to drive their business for the next 10 years.”
The 12th test launch of Starship is set for Friday from the company’s south Texas launch facility. The rocket is the third version of craft, standing more than 400 feet tall and with about three times the payload of the second version.
The regulatory filing claims that the market for its rocket, internet and mobile telephone businesses could be as large as $28.5 trillion.
SpaceX also plans to launch thousands of orbiting data centers powered by the sun that would perform AI calculations.
With the company making massive capital investments, it recorded a $4.28-billion loss in the first quarter. Last year, it recorded $18.7 billion in revenue and lost $4.94 billion, according to the filing.
The public offering is expected to hit the market next month after a “road show,” during which SpaceX will seek to drum up interest from institutional and retail investors.
It will arrive after a fairly quiet year for IPOs that was brightened last week when Cerebras Systems, a Sunnyvale company that makes semiconductors for AI supercomputers, went public.
Shares at Cerebras were offered at $185 and jumped 68% on its opening day. They closed Wednesday at $290.69.
Matt Kennedy, a senior strategist at Renaissance Capital, said the SpaceX offering would dwarf that of Cerebras, as it is expected to raise more than every IPO combined in the last two years.
“A win here or a loss could really impact the IPO market,” he said. “The sheer size of this deal is going to make or lose fortunes.”
Among the oddest disclosures of the IPO is a decision by the company’s board in January to grant Musk 1 billion Class B shares if the company reaches a certain market capitalization and establishes a “permanent human colony on Mars with at least one million inhabitants.”
Erewhon opened its newest location in Glendale on Wednesday, marking the luxury grocer’s 14th store in Southern California with more set to open soon.
The new store, located at 520 N. Glendale Ave., includes the chain’s signature cafe and tonic bar as well as an indoor-outdoor patio space.
Known for its upscale, trendy products and high prices, Erewhon has grown into a tourist destination in Los Angeles and a hot spot for celebrities and influencers.
The Glendale location will bring Erewhon staples to trendy consumers in the area, including the beloved Strawberry Glaze Skin Smoothie, which until last year was named after the model Hailey Bieber.
Employees at the store handed out complimentary gift bags and fresh flowers during the grand opening Wednesday morning.
“This location was designed to reflect the spirit of the neighborhood while creating a welcoming space to gather, centered around wellness, connection, and a commitment to the quality standards that define Erewhon,” Erewhon President Josephine Antoci said in a statement.
The company purchased the space, which was formerly a hardware store, in 2024.
Erewhon has locations in several of Southern California’s wealthiest areas, including Calabasas and Beverly Hills. It also has stores in Venice, Manhattan Beach and at the Grove.
“Erewhon’s decision to invest in Glendale reflects confidence in our city’s economic future,” Glendale Mayor Ardashes Kassakhian said in a news release.
The grocer was founded in 1966 by Japanese immigrants Michio and Aveline Kushi — pioneers of the natural-foods macrobiotic movement — who began selling imported organic goods out of their Boston home. In 1969, the company opened its first Los Angeles location on Beverly Boulevard.
Josephine and Tony Antoci bought the company in 2011 and helped launch it to its luxury status with a cult-like following. Tony serves as chief executive while Josephine handpicks much of the store’s merchandise.
By the mid-2010s, Erewhon had become a watering hole for celebrities such as the Kardashians and the Beckhams.
The company has its eye on further expansion. A Thousand Oaks location is slated to open this August and stores in Costa Mesa and downtown Los Angeles are planned for 2027. An Erewhon cafe opened in the Los Angeles County Museum of Art’s new David Geffen Galleries earlier this month.
The Pacific Palisades location, which shut down after the wildfires last year, is set to reopen in January.
The Glendale Erewhon takes the place of Virgil’s Hardware Home Center, which opened in 1932 and closed in 2019.
-
Politics3 minutes agoInfluencer files complaint against Steyer campaign, alleging violations
-
Sports15 minutes agoHigh school softball: Saturday’s Southern Section semifinals playoff schedule
-
World27 minutes agoDombrovskis rules out easing Russia sanctions despite inflation fears
-
News57 minutes agoCharges dropped against activists in Chicago immigration crackdown amid grand jury misconduct claims | CNN
-
New York2 hours agoHe Sued the N.Y.P.D. He Advised ‘Homeland.’ Now He’s Mamdani’s Lawyer.
-
Los Angeles, Ca3 hours agoLoved ones search for missing 21-year-old Southern California man with special needs
-
Detroit, MI3 hours agoSouthfield Freeway closed after shooting in Detroit, state police says
-
San Francisco, CA3 hours agoSan Francisco soccer league Girls Got Goals ready for World Cup in Bay Area
