Dow Jones index settles above 50,000 for first time

Today’s headlines

What’s happening: US stocks closed sharply higher on Friday, with the Dow Jones index breaching the 50,000 mark for the first time in its history.

What happened: The blue-chip index has been rising faster than other stock indices on Wall Street so far this year, with investors now preferring names beyond tech stocks.

Shares of Caterpillar surged on Friday, giving the Dow Jones index the biggest fillip.

Why it matters: The Dow Jones index was the top performer in the US stock market on Friday, following a broad selloff in tech stocks last week due to rising concerns around the returns from huge AI investments.

Caterpillar’s stock jumped around 7.1% on Friday, providing the biggest push to the Dow Jones index. The stock has added around 27% so far this year, after surging more than 50% last year, propelled by high demand for its natural gas generators that power AI datacentres.

Shares of Goldman Sachs also provided a boost to the blue-chip index on Friday. Nvidia’s stock climbed 7.9% on Friday after recording losses in recent sessions. Broadcom’s shares recorded sharp gains with the demand for its custom AI chip unit growing rapidly.

Data released on Friday showed the University of Michigan’s consumer sentiment index gained 0.9 points to reach 57.3, the third straight month of growth. The figure also topped market estimates of 55.

Total US consumer credit surged by $24.05 billion in December, compared to a rise of $4.70 billion in the previous month. The figure was more than market estimates of an $8 billion gain.

The Dow Jones index jumped 1,206.95 points, or 2.47%, to close at 50,115.67 on Friday, while the S&P 500 surged 1.97% to settle at 6,932.30. The Nasdaq 100 climbed 2.15% to finish at 25,075.77.

The Dow Jones index has gained around 4.3% so far this year, versus a 1.3% rise in the S&P 500 and a 0.9% decline in the Nasdaq 100.

The Nasdaq 100 closed the week with a 1.9% loss, while the S&P 500 was down 0.1%. The Dow Jones index added 2.6% in the week.

What to watch: Data on consumer inflation expectations (2000 UAE Time) will be released today. Median one-year-ahead inflation expectations in the US, which surged to 3.4% in December from 3.2% in the previous month, are expected to remain at 3.4% in January.

Investors also await the release of data on retail sales, export and import prices, scheduled for release on Tuesday.

The markets today

The Canadian dollar in focus today ahead of some major economic reports this week

Context: The Canadian dollar rose versus the US dollar this morning as investors digested the latest jobs data.

Details: Data released on Friday showed that Canada’s employment declined by 25,000 in January. The figure came in significantly worse than market expectation of a gain of 7,000 and represented the sharpest monthly decline since August 2025.

The unemployment rate eased to 6.5% in January from 6.8% in December and came in better than market estimates of 6.8%. It was also the lowest reading in 16 months.

Canada’s Ivey Purchasing Managers Index declined to 50.9 in January from 51.9 in the previous month but was higher than market estimates of 49.7 and signalling continued expansion.

Last week, Prime Minister Mark Carney unveiled plans to strengthen Canada’s car industry and EV transition in an effort to reduce the country’s reliance on the US.

Weakness in the US dollar lent support to the Canadian currency this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell slightly to 97.61.

However, lower prices of crude oil, one of Canada’s major exports, weighed on the loonie. Spot prices for WTI crude oil fell around 0.8% to $62.83 per barrel this morning.

The USD/CAD pair fell more than 0.1% to 1.3663 this morning.

What to watch: Data on building permits from Canada will be released on Wednesday. Building permits in Canada, which dipped 13.1% to C$12.0 billion in November, are expected to surge by 9.7% in December. Data on new motor vehicle sales in Canada will be released on Friday.

Other Markets: European indices closed higher on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.59%, 0.94%, 0.43% and 0.89%, respectively.

The news shaping the markets

Ukraine’s President Volodymyr Zelenskyy said that the US wants the ongoing war with Russia to end by June and has invited both sides for negotiations next week. The news sent the USD/RUB pair higher in forex trading this morning.

Indonesia’s motorbike sales rose 3.1% year-over-year to 577,763 units in January, easing from a 14.5% surge in the previous month, which lent support to the USD/IDR forex pair.

Japan’s nominal wages surged 2.4% year-over-year in December, following 1.7% growth in the previous month, which sent the USD/JPY pair lower in forex trading this morning.

China’s foreign exchange reserves rose by $41.2 billion to $3.399 trillion in January, from $3.358 trillion in the previous month, which exerted pressure on the USD/CNY forex pair.

Colombia’s annual inflation rate accelerated to 5.35% in January from 5.10% in the previous month, sending the USD/COP pair higher in forex trading this morning.

What else to watch today

Singapore’s foreign exchange reserves (1300 UAE Time), Mexico’s inflation rate (1600 UAE Time), France’s 12-month BTF auction (1800 UAE Time) as well as US 3-month Bill auction (2030 UAE Time) and 6-month Bill auction (2030 UAE Time).