What it is
The Dow Jones Industrial Average (DJIA), often simply called "the Dow," is a price-weighted stock market index comprising 30 significant American companies. It is one of the oldest and most widely recognized stock market indices, representing a broad snapshot of the U.S. industrial sector. Unlike market-capitalization-weighted indices, the Dow gives more weight to stocks with higher share prices, meaning a one-dollar change in a higher-priced stock has a greater impact on the index than the same dollar change in a lower-priced stock.
The Dow is frequently cited in financial news as a benchmark for the overall health of the U.S. stock market. Its components are selected by the editors of The Wall Street Journal and can change periodically to maintain relevance to the broader economy. Changes in the Dow's value are often interpreted as indicators of investor sentiment, with significant daily moves making headlines and influencing broader market perceptions. Retail investors often follow the Dow as a simple gauge of market direction.
Why it matters
The Dow offers a quick, albeit limited, view of the U.S. stock market's performance, helping gauge overall economic sentiment.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice