Dow Jones

The Dow Jones Industrial Average is one of the oldest stock market indices still in continuous use, first published on May 26, 1896 by Charles Dow, co-founder of Dow Jones & Company and The Wall Street Journal. The original index tracked just 12 industrial companies; it expanded to its current 30 in 1928.

Unlike most modern benchmarks, the Dow is price-weighted rather than weighted by market capitalization — a $500 stock moves the index more than a $50 stock regardless of which company is actually larger. This is a structural artifact of the index's 19th-century origins, before market-cap weighting became the industry standard. A "divisor," adjusted whenever a constituent splits its stock or is swapped for another company, keeps stock splits from distorting the index level.

The 30 components are chosen by a committee at S&P Dow Jones Indices, not by a fixed rule — there's no automatic market-cap or revenue cutoff. Selection favors large, well-established U.S. companies with a reputation for sustained growth, but the committee deliberately keeps the roster diversified across industries. Notably, the Dow excludes transportation and utility companies, which have their own separate benchmarks (the Dow Jones Transportation Average and Dow Jones Utility Average).

Because it holds only 30 stocks and weights them by price rather than size, the Dow is a narrower, more idiosyncratic gauge than the S&P 500 — a single high-priced constituent's earnings report can move the whole index disproportionately. Despite that quirk, it remains the benchmark most frequently quoted in general news coverage, largely due to its longevity and name recognition rather than its methodology.

The index's long history gives it a well-known set of milestones: it first closed above 1,000 in 1972, crossed 10,000 in 1999 during the dot-com boom, and passed 20,000 in early 2017. It has also been at the center of some of the most significant single-day moves in market history, including the crash of October 1987 ("Black Monday," the largest one-day percentage decline on record for the index), the 2008 financial crisis, and the sharp COVID-19 selloff and recovery in early 2020.

None of the Dow's original 1896 members remain in the index today under their original corporate form — General Electric, the last of the original 12 companies to still be included in some continuous lineage, was removed in 2018. The committee-driven, non-mechanical selection process means changes tend to happen in response to major corporate events (mergers, bankruptcies, or a company's business shifting away from the "industrial" character the index aims to represent) rather than on a fixed schedule.