A fast-innovating American economy. Massive companies consolidating power. Monetary and trade policy shifting beneath nervous investors’ feet.
It wasn’t February 2026, but May 1900. Railroads and industry had redrawn the country’s financial map and pushed Charles Dow and Edward Jones to launch stock indexes including the Dow Jones Industrial Average. As that gauge hovered around 60 points, there were conflicting signals about the future.
An unsigned Wall Street Journal column now attributed to Dow weighed customs data, coal prices and rail earnings against stock pickers’ penchant for euphoria. Should boomtowns dotting the new market be expected to shrink back into villages—or less? The answer, the author wrote, depended on whether “every boom carries with it the potentiality of a serious relapse.”
Wall Street is once again putting that proposition to the test, pushing Dow’s namesake index to a level unfathomable in its double-digit days near the turn of the 20th century. In a week fraught with dual worries that artificial-intelligence giants are overvalued and that their products could upend entire industries, the blue-chip index on Friday surpassed 50000 for the first time.
Black-and-white portraits of Charles H. Dow with a beard and Edward T. Jones with a mustache, founders of Dow Jones and Company.
Since the wreckage of the 2007-09 recession, when the Dow careened below 6600, the American economy has zoomed past its rich counterparts to become far larger than that of the European Union. Silicon Valley’s allure has created a giant sucking sound of money funneling into the U.S. stock market. The blue-chip index has doubled since the fallout of the pandemic, cementing itself as a barometer for long-term bets on U.S. growth.
The road to 100000 will run through an America showing many of the hallmarks of Charles Dow’s boomtowns. Artificial intelligence promises to reinvent entire industries and make many jobs obsolete. An infrastructure build-out of epic proportions is under way. The exuberance is drowning out concerns—even among top Wall Street executives—that a significant correction is due.
As in 1900, the challenge today is that nobody knows precisely when.
“Trees simply do not grow to the sky. This will not last forever,” said Ted Weisberg, chief executive of Seaport Securities. “Unfortunately, they don’t ring a bell and tell us when it’s time to get out of the tree.”
The longtime floor trader survived several of what he calls “it-looks-like-the-end-of-the-world” markets: Black Monday in 1987; the 2007-09 recession; the pandemic. Each time, the stock market recovered and then some. The 85-year-old still has “Dow 10000” and Dow “15000” hats that marked the good times.
While Wall Street often rewards those who lived through booms that went bust, said Weisberg, whose office is steps away from the New York Stock Exchange, that experience “doesn’t prevent you from making the same stupid mistakes over and over again.”
The Dow—a group of 30 companies often seen as an anachronism in an era of index investing and big data—doesn’t capture the full force of the current boom. Weighted by companies’ stock prices rather than their market capitalization, the index’s 13% advance to successive records in 2025 lagged behind the S&P 500’s 16% climb and the Nasdaq composite’s 20% rally.
Traders cheering on the floor of the New York Stock Exchange.
Still, the indexes have long moved in tandem.
Richly valued shares of Goldman Sachs, which is rushing to finance more tech infrastructure, contributed more points than any other company to the Dow since it hit 25000 for the first time in 2018. Industrial mainstay Caterpillar’s run-up is now fueled by data centers’ power demands, while IBM is increasingly focused on AI. Hyperscaler Microsoft and chip designer Nvidia, which joined the index last year, added to a rally drawing comparisons to the 1990s dot-com bubble.
“The difference is that, in today’s market, you have very good companies with bad valuations,” said Neil Hennessy, a veteran investor and chairman of Hennessy Advisors. “These companies are making a lot of money.”
“When I look at the amount of money sitting out there and what’s happening, I look at the Dow Jones [average] as a coin-operated laundromat,” he added. “Have you ever seen a ‘Going Out of Business’ sign on a coin-operated laundromat? The answer is no.”
At the same time, though, Dow stocks more exposed to shifts in trade policy and consumer health are flashing caution lights. Nike, Procter & Gamble and Home Depot are all negative over the past year.
That type of divergence has piqued the interest of investors who question how to value AI’s ultimate payoff or struggle to understand the financial arrangements underpinning massive infrastructure spending.
Dow disciples track not only the industrial average, but also its relationship with its elder cousin, the Dow Jones Transportation Average. The pair aimed to capture the U.S. economy through makers and takers of goods—initially manufacturers and railroads. These days, the transports index is home to companies in the real-world businesses of logistics, shipping and air travel.
“If those averages are not in sync, that could be a yellow light for the economy and market,” said Chuck Carlson, chief executive of Horizon Publishing, which for decades has published the newsletter Dow Theory Forecasts.
A Union Pacific steam locomotive, number 9000, with smoke billowing from its smokestack, facing the viewer on train tracks as men stand on either side.
The Dow transports lagged far behind the industrials starting in early 2024, not long after the Federal Reserve jacked up interest rates to fight inflation and the AI race kicked into gear. That could have been an apt signal at a time when many nontech sectors showed signs of stress.
But the transports roared back in recent weeks with the hope that lower rates, tariff clarity and tax cuts will help the economy run hotter next year. The index is up 25% over the past three months, far ahead of its blue-chip counterpart’s roughly 6.8% gain.
“That comeback, to me, represents potential revival or pickup in this real economy,” Carlson said.
That optimism is returning in certain corners of the market, while scrutiny of the AI boom periodically ripples through others. Investors are souring on some speculative bets on unprofitable tech companies, while individual firms’ earnings reports or data-center construction updates spark price swings across the sector.
Traders shaking hands, wearing caps that say "DOW 50,000" on the floor of the New York Stock Exchange.
That dynamic swept through the stock market with force in recent days, propelling the Dow on a 1,000-point surge above the 50000 milestone. Worries that AI could disrupt software companies sparked a selloff that spread into chip shares and other companies linked to the infrastructure build-out for AI. Investors instead funneled money into real-economy firms like energy producers and consumer brands.
For Charles Dow, the volatile financial landscape around the turn of the 20th century largely reflected business cycles that drove ebbs and flows in corporate profits. But when it came to boomtowns that could shrink into villages when good times turned bad—shares that might lose value overnight—human psychology was also at play.
Investors’ tendency is to be “too optimistic at some times and too pessimistic at others,” the May 1900 Wall Street Journal column read. “While this lasts, the stock market is likely to feel the effects.”
The average searched for direction over the next few years. But by 1906, the Dow had nearly doubled to its first big milestone: 100 points.
