Stay on top of the latest market moves with Capital.com’s Dow Jones (US30) chart
The Dow Jones Industrial Average (DJIA), also known as the Dow Jones, Dow, USA 30 or US30, is a stock market index that measures the stock performance of 30 large publicly-listed companies on the United States stock exchanges.
Despite being the second-oldest stock market index in the US, the Dow is still considered to be one of the leading benchmarks of the country’s stock market. However, societal changes in recent years, coupled with criticisms of the methodology used to determine the index’s components, have led to suggestions that the Dow is no longer an accurate gauge of the market compared with other indices such as the S&P 500 (US500).
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Originally launched by Charles Dow in 1896, the Dow Jones Industrial Average originally comprised only 12 companies. This number was increased to 20 stocks in 1916, followed by an expansion to 30 stocks in 1928. Initial components of the index included prominent names such as American Cotton Oil Company, General Electric (GE) and the Tennessee Coal, Iron and Railroad Company, heavy industrial companies that, at the time, played a prominent role in the economy.
Today, the Dow looks vastly different. Following General Electric’s removal from the index in 2018, not a single company that formed the original index remains. Names such as Apple (AAPL), Microsoft (MSFT), Visa (V) and Intel (INTC) have been added as technology has taken a more important role in our lives.
There are no specific criteria a company must meet to be eligible for inclusion in the Dow, only that the company must be a large-cap, well-respected enterprise that “demonstrates sustained growth and is of interest to a large number of investors.” Companies are hand-picked by a committee of representatives from S&P Dow Jones Indices and The Wall Street Journal.
The Dow is price-weighted, meaning the stocks with the highest share price have a greater influence on the index price than lower-priced stocks. This is in opposition to the majority of other market indices which favour market capitalisation or industry size to weigh their constituents. For example, as of April 2021, Apple has the highest market capitalisation of any company in the United States at over $2trn, but only a 2.57% weighting on the Dow.
With Capital.com’s comprehensive chart, you can not only quickly view the value of the Dow Jones Industrial Average today, but also trace the index’s performance in historic terms.
The index launched amid a bull market, and from its first close at 62.76 rose steadily until a peak of 78.38 in 1890. Between 1890 and 1929, it went through a series of peaks and troughs before plunging to an all-time low of 41.22 on 8 July 1932. The bear market lasted until well after the end of the Second World War, when the index increased almost ten-fold in the following two decades, hitting 1,000 for the first time in 1966. Following the bear market of 1970-1980, the DJIA rose from 777 in 1982 to 11,722 in January 2000, an increase of more than 1,500%.
The Dow has continued on its upwards trajectory throughout the 21st century, despite suffering losses in the 2008 recession and the bear market following the coronavirus pandemic at the start of 2020. On 16 April 2021, the index closed the trading session at a high of 34,200.67.
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