(NEW YORK) — The Dow Jones Industrial Average closed above 38,000 for the first time ever on Monday, setting a record high and capping a steady rise that stretches back to last week.

The S&P 500 also reached a record high, closing at about 4,850. The tech-heavy Nasdaq inched up to 15,360 by the end of trading on Monday.

The major stock indexes kicked off the year with sluggish performance but began to turn upward in the middle of last week.

The recent surge follows a stellar showing for markets in 2023, driven in large part by optimism about the prospects for a “soft landing,” in which inflation comes down to normal levels while the economy avoids a recession.

Investor enthusiasm about AI also helped drive returns.

The market rally in recent days could owe in part to expectations among some investors of interest rate cuts at the Federal Reserve as soon as March.

Interest rate cuts would lower borrowing costs for consumers and businesses, potentially triggering a burst of economic activity through greater household spending and company investment.

But the Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand could lead to an acceleration of price increases.

Federal Reserve Governor Christopher Waller said early last week the central bank expects to cut rates this year, but that it won’t be “rushed” to make the decision soon. Those remarks helped send treasury yields soaring and major stock indexes tumbling.

Since then, however, the stock market has climbed.

This is a developing story. Please check back for updates.

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