Here's a look at the factors that led the Dow to reach 40,000.

The reached a milestone Thursday that seemed unfathomable a year ago.

For the first time, the 30-stock benchmark surpassed 40,000, with investors optimistic about the impact of artificial intelligence on corporate earnings and the possibility of the Federal Reserve reducing interest rates in the near future as inflation continues to decline.

Over the past 20,000 points, the Dow's journey has been a long and winding road.

In early 2017, the Dow closed above 20,000 as investors anticipated lower corporate taxes in the U.S. under President Donald Trump. This expectation was realized at the end of the year, causing the Dow to surpass 25,000 by January 2018.

In 2018, the Dow experienced a decline of more than 5% due to the fading excitement around lower taxes, escalating trade tensions between China and the U.S., and the Federal Reserve raising interest rates.

In 2019, the stock market rebounded as the Fed shifted its focus from increasing interest rates. By the beginning of 2020, the Dow had almost reached 30,000, hitting a record high of 29,551.42 on February 12, 2020.

The stock market experienced a significant decline during the Covid-19 pandemic, with the Dow falling 38% from its peak in February 2020 to a low of 18,213.65 in March 2020.

As progress on Covid vaccine development increased and the Fed and lawmakers implemented unprecedented economic support measures, the benchmark recovered. By November 2020, the Dow had surpassed 30,000 for the first time.

Despite experiencing a bear market that dropped the Dow to 28,660.51, the stock market has since recovered and surged 40% since reaching its low.

— CNBC's Gabriel Cortés contributed reporting.