Dow jumps 323 points, closes above 26,000 for first time in its 121-year history

The Dow closed above 26,000 for the first time Wednesday, continuing an early-year stock surge that has pushed the U.S. market to fresh records.

The Dow Jones industrial average rose 322.79 points, or 1.3%, to a record 26,115.65. It was the Dow's best one-day point gain in 14 months, or since the day before Donald Trump was elected president.

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The fresh milestone comes just 13 calendar days after the 30-stock index topped 25,000, marking the fastest 1,000-point climb in its history, according to S&P Dow Jones Indices.

The Dow, which rallied 25.1% last year, has continued its surge at the start of 2018 amid rising optimism that tax cuts will lift corporate earnings and the economy. In the first 11 trading days of the year it has risen nearly 1,400 points, or 5.6%.

A few days before Christmas the president signed off on a tax bill that slashed the corporate tax rate to 21% from 35%. Since then, Wall Street analysts have been boosting their 2018 earnings forecasts for U.S. companies at the quickest pace in a decade, providing a fresh tailwind for a market that some skeptics say is pricey.

Some Wall Street pros warn that the Dow may be rising too far, too fast.

“Given the speed with which the Dow broke through 26,000 you have to question what stops it breaching 27,000, 28,000 or even 30,000," says Jacob Deppe, head of trading at online trading platform Infinox. 

“But at the same time," he adds, "there is a danger that the U.S. stock market could accelerate so quickly that it decouples from the economic fundamentals most analysts think currently underpin it."

Gravity could come back to haunt the Dow, Deppe adds.

“The fear is the higher stocks climb now, the further they may have to fall later,” he says.