Stock Indices

Dow Jones

Dow Jones Industrial Average (DJIA)

The oldest index, made from the stock prices of 30 leading US blue chips — being price-weighted, high-priced stocks have a large effect.

In plain terms

The Dow Jones is the longest-running stock index, made by picking 30 leading US blue chips. Running over 100 years, it appears often in the news like "the Dow rose X points."

What is unusual is that it weights by "share price" itself, not company size (market cap). So a stock with a high per-share price has a larger effect on the index.

What it tells you

Holding only 30 blue chips, the Dow shows the mood of traditional US large-caps. Familiar and long-running, it is cited symbolically a lot.

But with only 30 stocks and price-weighting, it is rated as more limited than the S&P 500 in representing the whole market.

Formula

Dow Jones Industrial Average = price-weighted across 30 leading US blue chips
(the higher the share price, not the market cap, the larger the effect)

What high or low means

When the Dow, S&P 500, and NASDAQ rise together, it is read as broad market strength; when they diverge, a phase where which side (traditional large-caps vs tech) is strong splits.

If only the Dow lags or leads among the three, it may be due to its skew toward 30 blue chips.

Caution

The Dow's unusual "price-weighting" means a stock with a high price, even with a small business size, sways the index more. Different in character from the market-cap-bundled S&P 500, the S&P 500 is seen as better at representing the market.

With only 30 stocks, it is too narrow to see the whole market. The S&P 500 is usually treated as the more representative yardstick.

Index quotes are market data. This term is background for understanding market news. (※ Our screen handles individual companies' SEC-filed financials.)

Metrics to read alongside

S&P 500 (S&P 500 Index)

The Dow (30 stocks, price-weighted) and the S&P 500 (500 stocks, cap-weighted) bundle differently. Together they let you view the market narrowly and broadly (the S&P 500 is more representative).

NASDAQ

Comparing the Dow (traditional blue chips) and the NASDAQ (tech/growth) shows whether traditional industry or tech is leading the market.

See it in real stocks

Search US stocks on Stocklore to see Dow and other financial metrics alongside the sector average.

AAPL Apple Inc.MSFT Microsoft Corporation NVDA NVIDIA Corporation AMZN Amazon.com, Inc.Search stocks →

Exactly how Stocklore computes this metric (formula, thresholds, SEC source) is on the methodology page.

This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.