TheDow Jones Industrial Average (DJIA),Dow Jones, or simply theDow (/ˈdaʊ/), is astock market index of 30 prominent companies listed onstock exchanges in the United States.
The DJIA is one of the oldest and most commonly followed equity indices. It isprice-weighted, unlike other common indices such as theNasdaq Composite orS&P 500, which usemarket 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 indices, 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 beingwell-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 0.162 as of November 2025[update]. The factor is changed whenever a constituent company undergoes astock split so that the value of the index is unaffected by the stock split.
The index is maintained byS&P Dow Jones Indices, an entity majority-owned byS&P Global. Its components are selected by a committee that includes three representatives from S&P Dow Jones Indices and two representatives from theWall Street Journal.[8] The ten components with the largestdividend yields are commonly referred to as theDogs 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.
As of November 8, 2024, the components of the DJIA have changed 59 times since its beginning on May 26, 1896.General Electric had the longest presence on the index, beginning in the original index in 1896 and ending in 2018, but was dropped and re-added twice between 1898 and 1907. Changes to the index since 1991 are as follows:
On February 19, 2008,Chevron Corporation andBank of America replacedAltria Group andHoneywell. Chevron was previously a Dow component from July 18, 1930, to November 1, 1999. During Chevron's absence, its split-adjusted price per share went from $44 to $85, while the price of petroleum rose from $24 to $100 per barrel.[14]
On March 19, 2015,Apple Inc. replacedAT&T, which had been a component of the DJIA since November 1916.[23][24] Apple became the fourth company traded on the NASDAQ to be part of the Dow.
On June 26, 2018,Walgreens Boots Alliance replacedGeneral Electric, which had been a component of the DJIA since November 1907, after being part of the inaugural index in May 1896 and much of the 1896 to 1907 period.[26][27][28]
In the derivatives market, the CME Group through its subsidiaries theChicago Mercantile Exchange (CME) and theChicago Board of Trade (CBOT), issues Futures Contracts; theE-mini Dow ($5) Futures (YM), which track the average and trade on their exchange floors respectively. Trading is typically carried out in anopen outcry auction, or over an electronic network such as CME's Globex platform.
TheChicago Board Options Exchange (CBOE) issues option contracts on the Dow through the root symbol DJX. Options on various Dow-underlying ETFs are also available for trading.[38]
DJIA monthly trading volume in shares from 1929 to 2012
In 1884,Charles Dow composed his first stock average, which contained nine railroads and two industrial companies that appeared in theCustomer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor toThe Wall Street Journal. On January 2, 1886, the number of stocks represented in what is now theDow Jones Transportation Average dropped from 14 to 12, as theCentral Pacific Railroad andCentral Railroad of New Jersey were removed. Though comprising the same number of stocks, this index contained only one of the original twelve industrials that would eventually form Dow's most famous index.[41]
Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as theDow Jones Industrial Average. None of the original 12 industrials still remain part of the index.[42]
When it was first published in the mid-1880s, the index stood at a level of 62.76. It reached a peak of 78.38 during the summer of 1890, but reached its all-time low of 28.48 in the summer of 1896 during thePanic of 1896. Many of the biggest percentage price moves in the Dow occurred early in its history, as the nascent industrial economy matured. In the 1900s, the Dow halted its momentum as it worked its way through two financial crises: thePanic of 1901 and thePanic of 1907. The Dow remained stuck in a range between 53 and 103 until late 1914. The negativity surrounding the1906 San Francisco earthquake did little to improve the economic climate; the index broke 100 for the first time in 1906.[45]
At the start of the 1910s, thePanic of 1910–1911 stifled economic growth. On July 30, 1914, as the average stood at a level of 71.42, a decision was made to close theNew York Stock Exchange, and suspend trading for a span of four and a half months. Some historians believe the exchange was closed because of a concern that markets would plunge as a result of panic over the onset ofWorld War I. An alternative explanation is that theUnited States Secretary of the Treasury,William Gibbs McAdoo, closed the exchange to conserve the U.S. gold stock in order to launch theFederal Reserve System later that year, with enough gold to keep the United States on par with thegold standard. When the markets reopened on December 12, 1914, the index closed at 74.56, a gain of 4.4%. This is frequently reported as a large drop, due to using a later redefinition. Reports from the time say that the day was positive.[46] Following World War I, the United States experienced another economic downturn, thePost–World War I recession. The Dow's performance remained unchanged from the closing value of the previous decade, adding only 8.26%, from 99.05 at the beginning of 1910, to a level of 107.23 at the end of 1919.[47]
The Dow experienced a long bull run from 1920 to late 1929 when it rose from 73 to 381 points.[48] In 1928, the components of the Dow were increased to 30 stocks near the economic height of that decade, which was nicknamed theRoaring Twenties. This period downplayed the influence of theDepression of 1920–1921 and certain international conflicts such as thePolish–Soviet War, theIrish Civil War, theTurkish War of Independence and the initial phase of theChinese Civil War. After a peak of 381.17 on September 3, 1929, the bottom of the 1929 crash came just 2 months later on November 13, 1929, at 195.35 intraday, closing slightly higher at 198.69.[49] TheWall Street Crash of 1929 and the ensuingGreat Depression over the next several years saw the Dow continue to fall until July 8, 1932, when it closed at 41.22,[50] roughly two-thirds of its mid-1880s starting point and almost 90% below its peak. Overall for the 1920s decade, the Dow still ended with a healthy 131.7% gain, from 107.23 to 248.48 at the end of 1929.[48] In inflation-adjusted numbers, the high of 381.17 on September 3, 1929, was not surpassed until 1954.
Marked by global instability and the Great Depression, the 1930s contended with several consequential European and Asian outbreaks of war, leading to the catastrophicWorld War II in 1939. Other conflicts during the decade which affected the stock market included the 1936–1939Spanish Civil War, the 1935–1936Second Italo-Abyssinian War, theSoviet-Japanese Border War of 1939, and theSecond Sino-Japanese War of 1937. The United States experienced theRecession of 1937–1938, which temporarily brought economic recovery to a halt. Thelargest one-day percentage gain in the index happened in the depths of the 1930s bear market on March 15, 1933, when the Dow gained 15.34% to close at 62.10. However, as a whole throughout the Great Depression, the Dow posted some of its worst performances, for a negative return during most of the 1930s for new and old stock market investors. For the decade, the Dow Jones average was down from 248.48 at the beginning of 1930, to a stable level of 150.24 at the end of 1939, a loss of about 40%.[51]
Post-war reconstruction during the 1940s, along with renewed optimism of peace and prosperity, brought about a 33% surge in the Dow from 150.24 to 200.13. The strength in the Dow occurred despite theRecession of 1949 and various global conflicts.
During the 1950s, theKorean War and theCold War did not stop the Dow's climb higher. A nearly 240% increase in the average from 200.13 to 679.36 ensued over the course of that decade.
The 1970s marked a time of economic uncertainty and troubled relations between the U.S. and certain Middle-Eastern countries. The1970s energy crisis was a prelude to a disastrous economic climate along withstagflation, the combination of high unemployment and high inflation. However, on November 14, 1972, the average closed at 1,003.16, above the 1,000 mark for the first time, during a brief relief rally in the midst of a lengthy bear market.[45] Between January 1973 and December 1974, the average lost 48% of its value in what became known as the1973–1974 stock market crash, closing at 577.60 on December 6, 1974.[52] The nadir came after prices dropped more than 45% over two years since the NYSE's high point of 1,003.16 on November 4, 1972. In 1976, the index reached 1,000 several times and it closed the year at 1,004.75. Although theVietnam War ended in 1975, new tensions arose towardsIran surrounding theIranian Revolution in 1979. Performance-wise for the 1970s, the index remained virtually flat, rising 4.8% from 800.36 to 838.74.
The Dow fell 22.61% onBlack Monday (1987) from about the 2,500 level to around 1,750. Two days later, it rose 10.15% above the 2,000 level for a mild recovery attempt.
The 1980s began with theearly 1980s recession. In early 1981, the index broke above 1,000 several times, but then retreated. After closing above 2,000 in January 1987,[45] thelargest one-day percentage drop occurred onBlack Monday, October 19, 1987, when the average fell 22.61%. There were no clear reasons given to explain the crash.
On October 13, 1989, theFriday the 13th mini-crash, which initiated the collapse of thejunk bond market, resulted in a loss of almost 7% of the index in a single day.[53]
The Dow soared from 2,753 to 8,000 between January 1990 to July 1997.[45] In October 1997, the events surrounding the1997 Asian financial crisis plunged the Dow into a 554-point loss to a close of 7,161.15; a retrenchment of 7.18% in what became known as theOctober 27, 1997 mini-crash.
On March 29, 1999, the average closed at 10,006.78, its first close above 10,000. This prompted a celebration on the New York Stock Exchange trading floor, complete with party hats.[57] Total gains for the decade exceeded 315%; from 2,753.20 to 11,497.12, which equates to 12.3% annually.
The Dow averaged a 5.3% return compounded annually for the 20th century, a recordWarren Buffett called "a wonderful century"; when he calculated that to achieve that return again, the index would need to close at about 2,000,000 by December 2099.[58]
The Dow fell 14.3% after theSeptember 11 attacks. Exchanges were closed from September 12 through September 16, 2001.
On September 17, 2001, the first day of trading after theSeptember 11 attacks on the United States, the Dow fell 7.1%. However, the Dow began an upward trend shortly after the attacks, and regained all lost ground to close above 10,000 for the year. In 2002, the Dow dropped to a four-year low of 7,286 on September 24, 2002, due to thestock market downturn of 2002 and lingering effects of thedot-com bubble. Overall, while the NASDAQ index fell roughly 75% and the S&P 500 index fell roughly 50% between 2000 and 2002, the Dow only fell 27% during the same period. In 2003, the Dow held steady within the 7,000 to 9,000-point level and recovered to the 10,000 mark by year end.[59]
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.[60] It then dropped over the next year due to the2008 financial crisis.
On September 15, 2008, a widerfinancial crisis became evident after theBankruptcy of Lehman Brothers along with the economic effect of record high oil prices which had reached almost $150 perbarrel two months earlier. The Dow lost more than 500 points for the day, returning to its mid-July lows below 11,000.[61][62] A series ofbailout packages, including theEmergency Economic Stabilization Act of 2008, proposed and implemented by theFederal Reserve andUnited States Department of the Treasury did not prevent further losses. After nearly six months of extreme volatility during which the Dow experienced its largest one-day point loss, largest daily point gain, and largest intraday range (of more than 1,000 points) at the time, the index closed at a new 12-year low of 6,547.05 on March 9, 2009,[63] its lowest close since April 1997. The Dow had lost 20% of its value in only six weeks.
Towards the latter half of 2009, the average rallied towards the 10,000 level amid optimism that theGreat Recession, theUnited States housing bubble and the2008 financial crisis, were easing and possibly coming to an end. For the decade, the Dow saw a rather substantial pullback for a negative return from 11,497.12 to 10,428.05, a loss of a 9.3%.[64]
On May 6, 2010, the Dow lost 9.2% intra-day and regained nearly all of it within a single hour. This event, which became known as the2010 Flash Crash, sparked new regulations to prevent future incidents.[65]
Six years after its previous high in 2007, the Dow finally closed at a new record high on March 5, 2013.[66] It continued rising for the next several years past 17,000 points until a brief2015–2016 stock market selloff in the second half of 2015.[67] It then picked up again in early 2016 and climbed past 25,000 points on January 4, 2018.[68]
Volatility returned in 2018 when the Dow fell nearly 20%.[70][71][72] By early January 2019, the index had quickly rallied more than 10% from its Christmas Eve low.[73]
Overall in the 2010s decade, the Dow increased from 10,428.05 to 28,538.44 for a substantial gain of 174%.[74]
The Dow Jones Industrial Average daily closing value plotted on a log-10 scale
Despite the emergingCOVID-19 pandemic, the Dow continued its bull run from the previous decade before peaking at 29,551.42 on February 12, 2020 (29,568.57 intraday on the same day). The index slowly retreated for the remainder of the week and into the next week, before coronavirus fears and anoil price war between Saudi Arabia and Russia sent the index into atailspin, recording several days of losses[75] (and gains[76]) of at least 1,000 points, a typical symptom of a bear market[77] as previously seen in October 2008 during the2008 financial crisis. Volatility rose high enough to trigger multiple 15-minutetrading halts.[78] In the first quarter of 2020, the DJIA fell 23%, its worst quarter since 1987.[79] The market recovered in the third quarter, returning to 28,837.52 on October 12, 2020, and peaked momentarily at a new all-time high of 29,675.25 on November 9, 2020, at 14:00 ET, following that day's announcement of the success of thePfizer–BioNTech COVID-19 vaccine in Phase III clinical trials.[80] The Dow (as reported by the United Press International) closed over 30,000 on December 31, 2020, at a record 30,606.48. On November 24, following news that thepresidential transition of Joe Biden was approved, the Dow increased by more than 500 points, closing at 30,046.24. On January 22, 2024, the Dow Jones crossed 38,000 points for the first time; a month later it surpassed 39,000; and in May, it surpassed 40,000 points.
The DJIA is computed as the sum of the prices of all thirty stocks divided by adivisor, the Dow Divisor. The divisor is adjusted in case of stock splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. Early on, the initial divisor was composed of the original number of component companies; this initially made the DJIA a simplearithmetic average. The present divisor, after many adjustments, is less than one, making the index larger than the sum of the prices of the components. That is:
wherep are the prices of the component stocks andd is theDow Divisor.
Events such asstock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow Divisor is updated so that the quotations right before and after the event coincide:
Since October 30, 2025,[update] the Dow Divisor is0.16242563904928[81][82] and every $1 change in price in a particular stock within the average equates to a6.156663 (or 1÷ 0.16242563904928) point movement.
Despite its unusual weighting by price rather than market capitalization, the Dow Jones Industrial Average is highly correlated with other proxies of the US equities market, particularly theS&P 500 Index.[7] Between (1980-January-{{{day}}}) (2023-November-{{{day}}})January 1980 – November 2023, the DJIA returned an annualized 8.90%, with the S&P 500 returning a nearly identical 8.91%.[83]
With the inclusion of only 30 stocks, critics such asRic Edelman argue that the DJIA is an inaccurate representation of overall market performance compared to more comprehensive indices such as the S&P 500 Index or theRussell 3000 Index. Additionally, the DJIA is criticized for being aprice-weighted index, which gives higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative industry size or market capitalization of the components. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the lower-priced stock experienced a largerpercentage change. In addition, a $1 move in the smallest component of the DJIA has the same effect as a $1 move in the largest component of the average. For example, during September–October 2008, former componentAIG's reverse split-adjusted stock price collapsed from $22.76 on September 8 to $1.35 on October 27; contributing to a roughly 3,000-point drop in the index.[84]
As of June 2021,[update] Goldman Sachs and UnitedHealth Group are among the highest-priced stocks in the average and therefore have the greatest influence on it. 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 professionals[who?] recommend themarket-capitalization weighted S&P 500 Index or theWilshire 5000, the latter of which includes most publicly listed U.S. stocks, as better indicators of the U.S. stock market.
A study between the correlation of components of the Dow Jones Industrial Average compared with the movement of the index finds that the correlation is higher when the stocks are declining. The correlation is lowest in a time when the average is flat or rises a modest amount.[86]
.svg)
.svg)
