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The Dow Jones Industrial Average, known as the Dow Jones or the DJ30, is a stock market index based on 30 of the top companies found on the different stock exchanges operating in the US.
This is a price-weighted index with a narrower focus than indices such as the S&P 500, which covers more companies. However, with a history going back to 1896, the longevity of this index means that the DJ30 price is still followed by many financial experts and is the basis of numerous types of investment.

While the full name of the index includes the word industrial, this no longer reflects the current make-up. The 30 companies that this index tracks come from all different types of industries, from soft drinks to financial services and clothing. The companies listed on it change from time to time, with a committee deciding upon any changes. None of the firms included in the very first issue of the index are still listed in the latest version.

The Dow Jones index ended its first year of publication with a closing value of 39.29. By the start of the 20th century, it was over 10,000, and 2021 set a new closing record with over 36,000 at the end of the year.

This Dow Jones price reflects the performance of the 30 individual shares in it and is also affected by wider economic conditions. If we look at the biggest daily gains made over the years, we can see that they arrived partly due to major events such as the passing of the Emergency Banking Act in 1933, which brought stability to the American banking system, and that led to a 15.34% increase in this index.
In the same way, the largest Dow Jones price falls are linked to dates such as Black Monday in 1987 and the Wall Street Crash of 1929. Trying to work out the next crash or significant rise in the DJ30 price is one of the main goals for many people working in the stock market.

Since this is an index, you can’t directly buy shares in it. However, there is a huge market for financial products that are based on the Dow Jones price. Futures and options contracts based on the index are heavily traded, with these options typically used by more experienced traders or those willing to learn key skills.

Index funds such as mutual funds track and look to match the performance of the DJ30, although investors may have to pay fees that reduce the performance to below that of the index itself. Among the benefits of investing in a fund that tracks this type of stock market index is that it automatically creates a diversified portfolio when compared to single stock purchases.