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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
An index of 30 major US companies. The oldest and most famous stock index.
Why It Matters
The Dow is the granddaddy of stock indexes, created in 1896. When the news says 'the market was up 500 points,' they usually mean the Dow. But here's the catch: with only 30 stocks and a weird price-weighted formula, it's actually a poor representation of the overall market. The S&P 500 is better - but the Dow is more famous.
Key Points
- Price-weighted means expensive stocks matter more - a $500 stock moves the Dow more than a $50 stock
- Current Dow 30 includes: Apple, Microsoft, Walmart, Disney, Nike, Coca-Cola, McDonald's
- The Dow started at 40.94 points in 1896 - it crossed 40,000 in 2024
Related Terms
Common Questions
An index of 30 major US companies. The oldest and most famous stock index. The Dow is the granddaddy of stock indexes, created in 1896. When the news says 'the market was up 500 points,' they usually mean the Dow.
The Dow is the granddaddy of stock indexes, created in 1896. When the news says 'the market was up 500 points,' they usually mean the Dow. But here's the catch: with only 30 stocks and a weird price-weighted formula, it's actually a poor representation of the overall market. The S&P 500 is better - but the Dow is more famous.
Price-weighted means expensive stocks matter more - a $500 stock moves the Dow more than a $50 stock
Current Dow 30 includes: Apple, Microsoft, Walmart, Disney, Nike, Coca-Cola, McDonald's
The Dow started at 40.94 points in 1896 - it crossed 40,000 in 2024