The index is maintained by S&P Dow Jones Indices, which is controlled by S&P Global. However, when you compare the S&P 500 to the Dow, you’ll see similar performance over time. Where the Dow favors sectors like financial services and heavy industry, it is considered underweighted in tech. Notably missing are Amazon, Facebook, and Tesla, which appear in both the S&P 500 and the Nasdaq. The DJIA doesn’t include every giant publicly traded stock. None of the companies originally in the index remain. Like the economy, the index evolves over time. In fact, in 2020, it replaced ExxonMobil, Raytheon, and Pfizer with Salesforce, Amgen, and Honeywell.

The Dow isn’t a static index: Stocks can be removed and replaced. As the economy changed over time, so did the composition of the index, which increased to 30 stocks by 1928 and has been fixed at that number ever since.

Dow was renowned for explaining complicated financial concepts in lay terms for the public and created the index so investors could have a benchmark, rather than sifting through the market for trends on their own.ĭow started the index with 12 mostly industrial stocks, including railroads, cotton, gas, and oil. The index was created in 1896 by Wall Street Journal reporter Charles Dow with fellow journalists Edward Jones and Charles Bergstresser. The Dow is the second-oldest US market index still in use, after the Dow Jones Transportation Average. The S&P 500 is made up of 500 large-cap stocks, and the Nasdaq index tracks almost 3,500-nearly every stock and security traded on the Nasdaq exchange, both domestic and international. The other two are the S&P 500 Index and the Nasdaq Composite Index-both much larger than the Dow, but not necessarily more influential. The Dow Jones Industrial Average, an index made up of 30 of the biggest and most important US companies, is one of three major stock indexes investors use to measure stock market performance.

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