Stock market today: S&P 500, Nasdaq hit fresh record highs as Wall Street gets bullish

The performance of the Dow Jones Industrial Average (DJIA) has been compared to the Nasdaq Composite and S&P 500 over the last 20 years. The DJIA returned 268% over this period, or 6.7% annually. The Nasdaq Composite, heavily weighted toward technology stocks, had the strongest performance with a 687% return, or 10.9% annually. The S&P 500 returned 345% over the last 20 years, compounding at 7.7% annually. However, with dividends reinvested, the S&P 500 delivered a total return of 546% over the same period, compounding at 9.8% annually.

In the short term, over the past year, the S&P 500 advanced 27%, the Dow Jones Industrial Average advanced 18%, and the Nasdaq Composite advanced 40%.

It's important to note that these indexes have different criteria for including stocks, different methods of assigning weightings to constituents, and different coverage universes. The Nasdaq Composite and the S&P 500 are market capitalization-weighted, while the Dow assigns weights based on the price of a stock. The Nasdaq Composite and the S&P 500 also have broader and bigger coverage universes compared to the Dow.

Depending on the economy and the state of the markets, each index can produce different gains or losses. For example, in rising markets, the S&P 500 can produce higher gains compared to the Dow due to the presence of more sectors and small-cap stocks in its portfolio. The opposite happens during downturns, when investors move into the safe harbor provided by the stocks of well-established companies with proven business models and dividends.

Last week's inflation reports and the Federal Reserve meeting had a significant impact on current market trends. The inflation reports showed a slight increase in consumer prices, which led to concerns about the possibility of the Federal Reserve raising interest rates again in the future. However, the Federal Reserve's meeting showed a more dovish stance, indicating that they are likely to hold interest rates steady for the time being.

This news was welcomed by the markets, as the S&P 500 and the Nasdaq hit fresh record highs, while the Dow Jones Industrial Average also rose. The market is now anticipating that the Federal Reserve will cut interest rates in September, as inflation appears to be under control for the moment.

Overall, the impact of the inflation reports and the Federal Reserve meeting on current market trends is positive, as the markets have responded well to the news that interest rates are likely to remain steady for now, and may even be cut in the near future.