STORY: The Dow Jones industrial Average reached an intra-day high of 40,000 for the first time on Thursday, as investor hopes of interest-rate cuts by the Federal Reserve were buoyed by data showing an inflation slowdown, as well as strong corporate earnings.

But after paring earlier gains, the blue-chip index ended down one tenth of a percent. The S&P 500 fell two tenths and the Nasdaq slipped a quarter of a percent.

All three major indexes notched record closes in the previous session after a smaller-than-expected rise in consumer prices fueled optimism that inflation resumed its downward trend after three months of hotter-than-expected readings.

But Pacer ETF President Sean O'Hara says he's concerned about the high price-to-earnings ratio of the market.

"I think that will continue to see some turbulence in the market, based on what we hear from the Fed and you know the thing that's somewhat concerning is that you know the market overall is still trading at fairly robust P/E somewhere like 22 to 24 times. And so, you know, if the expectation is that we're going to have like $270 worth of earnings on the S&P next year, 20 times that's you know 5400, that's not far from where we are, but any surprise to the downside on earnings or any more stubbornness as far as the Fed with regard to lowering interest rates, we'll challenge those higher valuations probably going forward."

Traders are back to betting on two quarter-point interest rate cuts by the Federal Reserve this year, with a 70% chance of the first reduction coming in September, according to the CME FedWatch Tool.

Stocks on the move included Walmart which added nearly 7% after topping profit and sales forecasts for its fiscal first quarter and raising its full year guidance.

Shares of Deere fell nearly 5% after the farm equipment maker trimmed its annual profit forecast for the second time.