The Dow’s all-time high at market close stands at 39,908.00, reached on May 15, 2024. The index hit its highest price at any time on May 16, 2024, when it surpassed 40,000 for the first time. Yes, the terms “Dow Jones” and “US 30” are often used interchangeably to refer to the same index. US 30 is a popular shorthand name for the Dow Jones Industrial Average (DJIA), as the index consists of the largest 30 US stocks (price-weighted). In the world of finance, you’ll often hear people ask, “How did New York do today?” or “How did the market perform today?” In both cases, these people are likely referring to the DJIA, as it is the most widely-used index. It is more popular than both the S&P 500 Index, which tracks 500 stocks, and the Nasdaq Composite Index, which includes more than 2,500 U.S. and international equities.
How Are Companies in the Dow Jones Industrial Average Selected?
We believe everyone should be able to make financial decisions with confidence. Throughout this article, we explored various aspects of the Dow Jones Index, the seven deadly sins of trading including its definition, differences from other indices, historical significance, and components. We also delved into its calculation methodology, eligibility criteria, and investment opportunities. Please keep in mind that the percentage changes provided represent the overall increase or decrease over the specified time periods.
- Given its large-cap focus, the roster of companies included in the Dow fails to include companies of other sizes.
- The bout of inflation that followed the COVID-19 pandemic led to another sharp sell-off in 2022.
- Often referred to as “the Dow,” the DJIA is one of the most-watched stock indexes in the world, containing companies such as Apple, Boeing, Microsoft, and Coca-Cola.
- The index is maintained by S&P Dow Jones Indices, an entity majority-owned by S&P Global.
The US 30 was created by journalist Charles Dow and his business partner Edward Jones in 1896. When the media reports that the stock market is up or down for the day, they often mean the US 30. Its movements are used as a proxy for the stock market’s overall performance. The DJIA tracks the price movements of 30 large companies in the U.S.. The selected companies are from all major U.S. sectors, except utilities and transportation.
The Dow Jones Industrial Average (DJIA)
The Russell 2000 index is considered a benchmark for smaller U.S. stocks. According to S&P Global, the Dow Jones Industrial Average is a “world-renowned gauge of the U.S. equity market.” Most Dow Jones Industrial Average-listed companies trade on the New York Stock Exchange. The Dow continued climbing and reached a record high of 14,198.10 on October 11, 2007, a mark which was not matched until March 2013.59 It then dropped over the next year due to the 2007–2008 financial crisis.
How Are Stocks Weighted on the DJIA?
It is important to note that the Dow Jones Industrial Average is an index created by Dow Jones & Company – the company and the index are not interchangeable. The table below alphabetically lists the companies included in the DJIA as of June 2024. Dow Jones was not a single person, but two of the three people who founded Dow Jones & Company in 1882. Charles Dow was the Dow in Dow Jones, Edward Jones was the Jones, and Charles Bergstresser was the company’s third founder. In 1889, they went on to found The Wall Street Journal, which remains one of the world’s most influential financial publications.
Over time, the index became a bellwether of the U.S. economy, reflecting economic changes. Steel was removed from the index in forex blog for traders 1991 and replaced by building material company Martin Marietta. Through much of 2022 and 2023, investors were cautious and bearish about equity markets as inflation rocketed. Then, in the last few months of 2023, investors began piling back in as hopes grew that interest rates would soon be cut and a nasty recession averted. One-sided bullish price action is marching back toward the 44,400 level, with the index’s latest pullback pricing in a soft technical floor near 43,200. Near-term momentum has a hard barrier priced in at the 50-day Exponential Moving Average (EMA) near 42,650.
Stock returns, US dollar, crypto farming: Market Takeaways
Nvidia put itself in better position to join the index in May, when the company announced a 10-for-1 stock split. While doing nothing to its market cap, the move slashed the price of each share by 90%, allowing the company to become a part of the Dow without the basics of currency trading having too heavy a weighting. Most professional investors focus on the performance of the S&P 500 because it includes a broad range of stocks and is weighted by market cap, which is a more accurate way to measure the overall health of the stock market. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products.
Alternately, Cisco Systems and Coca-Cola are among the lowest-priced stocks in the average and have the least sway in the price movement.85 Critics of the DJIA and most securities professionalswho? recommend the market-capitalization weighted S&P 500 Index or the Wilshire 5000, the latter of which includes most publicly listed U.S. stocks, as better indicators of the U.S. stock market. The DJIA is the second-oldest U.S. market index after the Dow Jones Transportation Average.
The peak was led in part by optimism that the Federal Reserve could cut interest rates later this year. Dow Jones bulls continue to keep prices elevated and out of harm’s way of any meaningful bearish technical signals. The major equity index is up around 5.8% in November, the index’s best-performing month to-date, and has added a tidy 18% from 2024’s opening bids. Generally, anyone can invest in the Dow Jones as long as they have access to the necessary investment platforms and meet the requirements set by financial institutions and regulatory bodies.
