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Dictionary / The stock market

What Is the Dow Jones?

The Dow Jones Industrial Average, or the Dow, is a stock index of 30 large, well-known US companies. It is one of the oldest ways to track the US stock market.

How the Dow works

The Dow adds up the share prices of its 30 companies and divides by a special number. Because it uses share prices, a company with a $500 share moves the Dow more than one with a $50 share, no matter how big each company really is.

Dow vs S&P 500

The S&P 500 has about 500 companies and weights them by market cap, which most experts see as a better measure. The Dow is older and more famous in the news, but covers far fewer companies.

Who is in the Dow?

A committee picks 30 leading blue chip companies from across the economy. Members change over time. Companies like Apple, Microsoft, Coca-Cola and JPMorgan have been members in recent years.

Can you invest in the Dow?

Not directly, but some ETFs copy it.

See it in real companies

Open a company to see what it sells and how it makes money.

Related terms

S&P 500500 large US companies in one index. Nasdaq CompositeAn index of almost every stock on the Nasdaq. Nasdaq-100The 100 biggest non-financial Nasdaq companies. Blue chip stocksShares of big, steady, well-known companies. Index fundA fund that copies a market index. Russell 2000An index of 2,000 small US companies.

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