Dow Jones Industrial Average
Historical logarithmic graph of the DJIA from 1896 to 2018 | |
| Foundation | February 16, 1885 (as DJA)[1] May 26, 1896 (as DJIA)[2] |
|---|---|
| Operator | S&P Dow Jones Indices |
| Exchanges | |
| Trading symbol |
|
| Constituents | 30 |
| Type | Large cap |
| Market cap | US$19.5 trillion (as of December 31, 2024)[3] |
| Weighting method | Price-weighted index |
| Website | www |
The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (/ˈdaʊ/), is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
The DJIA is one of the oldest and most commonly followed equity indices. It is price-weighted, unlike other common indexes such as the Nasdaq Composite or S&P 500, which use market capitalization.[4][5] The primary pitfall of this approach is that a stock's price—not the size of the company—determines its relative importance in the index. For example, as of March 2025, Goldman Sachs represented the largest component of the index with a market capitalization of ~$167B. In contrast, Apple's market capitalization was ~$3.3T at the time, but it fell outside the top 10 components in the index.[6]
The DJIA also contains fewer stocks than many other major indexes, which could heighten risk due to stock concentration. However, some investors believe it could be less volatile when the market is rapidly rising or falling due to its components being well-established large-cap companies.[7]
The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.163 as of November 2024. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.
First calculated on May 26, 1896,[2] the index is the second-oldest among U.S. market indexes, after the Dow Jones Transportation Average. It was created by Charles Dow, co-founder of The Wall Street Journal and Dow Jones & Company, and named after him and his business associate, statistician Edward Jones.
The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global. Its components are selected by a committee that includes three representatives from S&P Dow Jones Indices and two representatives from the Wall Street Journal[8]. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors.
- ^ "Dow Record Book Adds Another First". Philly.com. February 24, 1995. Archived from the original on October 4, 2013.
- ^ a b Judge, Ben (May 26, 2015). "26 May 1896: Charles Dow launches the Dow Jones Industrial Average". MoneyWeek. Archived from the original on October 6, 2019. Retrieved October 6, 2019.
- ^ "Dow Jones Industrial Average® Fact Sheet" (PDF). S&P Global.
- ^ Deporre, James (September 7, 2018). "Ignore the Misleading Dow Jones Industrial Average". TheStreet.com. Archived from the original on August 12, 2019. Retrieved August 12, 2019.
- ^ Dzombak, Dan (April 18, 2014). "Why the Dow Jones Industrial Average Is Useless". The Motley Fool. Archived from the original on August 12, 2019. Retrieved August 12, 2019.
- ^ SSGA, SSGA (March 31, 2025). "DJIA Factsheet" (PDF).
- ^ Cite error: The named reference
spglobalwas invoked but never defined (see the help page). - ^ CFA, Brian Baker (April 10, 2025). "What Is The Dow Jones Industrial Average?". Bankrate. Retrieved August 20, 2025.