Dow Jones Industrial Average
One of the oldest U.S. stock market indexes, tracking 30 large, well-established companies chosen to represent the broader economy.
Operator
S&P Dow Jones Indices
Launched
1896
Country
United States
Methodology
Price-weighted rather than market-cap weighted — higher-priced stocks move the index more than lower-priced ones, a quirk unique among major benchmarks.
How Investors Use This Index
Despite being the most frequently quoted index in daily news coverage, the Dow's price-weighting method means a $500 stock moves the index more than a $50 stock regardless of which company is actually larger by market value — a structural quirk most other major indexes avoid by weighting on market capitalization instead. Tracking only 30 companies also makes it a narrower gauge of the U.S. economy than the S&P 500's roughly 500 constituents, which is why professional investors more often reference the S&P 500 as the primary benchmark even though the Dow remains the most publicly recognized.
Major Sectors
Frequently Asked Questions
Why does the Dow only have 30 stocks?
It was designed in 1896 as a simple snapshot of industrial America. The count has stayed at 30 since 1928 by tradition rather than statistical necessity.
Is the Dow a good measure of the overall stock market?
Not really. Its price-weighting and narrow constituent count make the S&P 500 a more representative benchmark for U.S. equities broadly.
How are companies added to or removed from the Dow?
A committee at S&P Dow Jones Indices makes discretionary decisions, typically prompted by major corporate changes like spinoffs, bankruptcies, or shifts in economic relevance.
What's the Dow Divisor?
An adjustment factor that keeps the index level consistent through stock splits and component substitutions, so the index isn't distorted by purely mechanical share-count changes.