Plain-English definitions, reviewed by an independent investor
Dow Jones Industrial Average
The Dow is a price-weighted index of 30 large U.S. companies, the oldest market gauge in the news.
The Dow is a price-weighted index of 30 large U.S. companies, the oldest market gauge in the news.
(Price-weighted; 30 constituents)
Why it matters
It is the headline number on nightly news, if not the broadest measure.
Common confusion
Only 30 stocks and price-weighting make it less representative than cap-weighted indexes.
Frequently Asked Questions
Dow vs S&P 500?
The Dow is 30 price-weighted names; the S&P 500 is 500 weighted by size.
Why price-weighted?
A historical quirk; higher-priced stocks move the Dow more regardless of size.