The Dow Jones Industrial Average is a stock market index that tracks the share prices of 30 large, publicly traded U.S. companies, used as a general indicator of how the American stock market is performing. It’s one of the oldest and most widely quoted market indices in the world, commonly shortened to “the Dow.”
Who Actually Created the Dow, and When?
Charles Dow created the index in 1896, starting with just 12 companies, mostly in industrial sectors like railroads, sugar, and tobacco — hence the “Industrial” in the name. The list has changed many times since then as the economy shifted; not one of the original 12 companies remains on the index today. General Electric was the longest-standing original member, staying on the list until it was removed in 2018.
The index expanded to 30 companies in 1928, where it has stayed ever since, though which 30 companies make the list has changed regularly as older industrial giants declined and newer sectors — technology, healthcare, finance — grew to dominate the economy.
How Does the Dow Actually Get Its Number Each Day?
This is the part most explanations skip over, and it matters: the Dow is a price-weighted index, not a market-cap-weighted one. That means a company’s stock price determines its influence on the index — not the company’s overall size or value.
In practice, this creates an odd result: a company with a $500 share price moves the Dow more than a company with a $50 share price, even if the $50 company is worth far more overall in total market value. This is different from an index like the S&P 500, which weights companies by their total market capitalization, so a giant company has a bigger effect regardless of its individual share price.
The index’s value comes from adding up the share prices of all 30 companies and dividing by a number called the Dow Divisor. This divisor gets adjusted periodically to account for stock splits, spinoffs, and company changes, so the index stays comparable over time even as individual companies change or their stock prices split.
If It’s Flawed, Why Does Anyone Still Care About It?
Given its price-weighting quirk, the Dow isn’t the most technically precise measure of the U.S. stock market — most professional investors and analysts consider the S&P 500 a more accurate reflection of the broader market, since it covers 500 companies weighted by actual size. But the Dow has stayed relevant for a simple reason: it’s been around since 1896, it’s simple to understand, and decades of media coverage have made it the number most non-investors recognize when they hear about “the stock market” in the news. If you’re looking to invest in individual stocks rather than track an index, the same caution about verifying sources applies — we found the same pattern worth checking when we reviewed 5starsstocks.com’s income stock picks.
What Actually Makes the Dow Go Up or Down?
The same forces that move any major stock index apply here: Federal Reserve interest rate decisions, inflation reports, employment data, corporate earnings from the 30 component companies, and broader geopolitical events. Because it’s price-weighted, a single high-priced stock having a big move — up or down — can shift the entire index noticeably, even if the other 29 companies barely moved at all.
So Where Should You Actually Check Today’s Number?
We’re not going to quote a specific number here, and that’s intentional — the Dow changes by the second during trading hours, and any number printed in an article is outdated within moments. For the live, current value, check a source built to update in real time: Yahoo Finance, Google Finance, Bloomberg, MarketWatch, or your brokerage platform’s own quote page.
A quick warning worth passing along: a number of thin, template-written articles claiming to show “today’s Dow” are circulating on unrelated or clearly hacked websites — including at least one university research page and a nonprofit museum site with no connection to finance. If a “live Dow” article shows up on a site that has nothing to do with markets, that’s a signal to close the tab and check an actual financial source instead.
FAQ
How many companies are in the Dow Jones Industrial Average? 30. The number has been fixed at 30 since 1928, though the specific companies included have changed many times.
Is the Dow Jones the same as the stock market? No. It’s one index tracking 30 large companies — a widely watched sample, not the entire market. The S&P 500 and Nasdaq Composite track much broader sets of companies.
Why is the Dow price-weighted instead of weighted by company size? It’s a historical quirk — the index was created in 1896, before market-cap weighting became the standard approach most modern indices use.
Who decides which companies are in the Dow? A committee at S&P Dow Jones Indices selects and periodically updates the 30 component companies based on reputation, growth, and relevance to the broader economy.
Final Thought
The Dow Jones Industrial Average is a 128-year-old, price-weighted index of 30 major U.S. companies — useful as a quick, widely recognized snapshot of market sentiment, but not the most precise measure of the overall stock market. For the current value, always check a live financial data source rather than a static article, including this one.
