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The Dow Jones is a well known American stock index that tracks the performance of 30 large and influential companies in the United States. The full name is the Dow Jones Industrial Average. The index is often used as a benchmark for the American economy.
The Dow Jones consists of only 30 companies, but has significant global influence.
The index includes large enterprises from various sectors, such as industry, technology and healthcare. Unlike some other indices, the Dow Jones is calculated based on the share price, not on the total market value of companies. This means that shares with a higher price have more influence on the level of the index. Because the index consists of established companies, it is often seen as a measure of stable, large enterprises.
Short example:
Suppose the Dow Jones stands at 35,000 points. If several large companies within the index rise and the average price movement amounts to an increase of 5%, the index may rise to approximately 36,750 points.
If the same companies decline by an average of 5%, the index may fall back to approximately 33,250 points.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult a professional advisor when making financial decisions. The information and tips provided on this website are based on the personal insights and experience of our analysts and are intended for educational purposes only.
