The Dow Jones Industrial Average (DJIA), also simply known as the Dow, is a stock market index of 30 of the most prominent companies listed on stock exchanges in the United States. The DJIA one of the most followed equity indices and is price weighted. Other common indexes such as the Nasdaq and S&P 500 use market capitalization for weighting their components.

The primary constraint of using price weighting to determine the value of the index is that a stock’s price, and not the overall size or market capitalization of a company determines its relative importance to the index.

For example, as of August 2025, The Goldman Sachs Group, Inc represented the largest component of the index with a share price of $742, market capitalization of $224 billion, and an index weight of 10.06%. In contrast, NVIDIA Corp’s share price was $180.96 with a market capitalization of $4.15 trillion but it was ranked 19^th with an index weight of 2.54%.

The weight of each company listed in the DJIA is determined by the price of the stock. A $300 stock will be weighted more than a $50 stock. If a stock splits its corresponding weighting in the Dow Jones will be reduced as its price will be about half of what it was prior to the split. Individual stock weights are calculated by dividing the price of each company by the total price of all companies in the index.

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 the S&P 500 Index. Between January 1980 and November 2023, the DJIA returned an annualized 8.90%, with the S&P 500 returning a nearly identical 8.91%.

Note: Prices in the table below are listed in United States Dollars (USD)

Interesting Facts About The Dow Jones (DJIA)

• First calculated on May 26, 1896
• The index is the second oldest among U.S. market indices after the Dow Jones Transportation Average
• Created by Charles Dow, co-founder of both The Wall Street Journal and Dow Jones & Company
• Named after its founder Charles Dow and his business associate, statistician Edward Jones.
• Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average. None of the original 12 industrials still remain part of the index
• The first published value of the Dow Jones was 40.94.
• Index components are selected by a committee
• The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow
• The value of the index itself is affected by the performance of the respective companies as well as macroeconomic factors.

Historical Annual Returns – End-of-year closing values for DJIA

Dow Jones Industrial Average Trading Volume – 1929 to 2012