The Dow Jones Industrial Average (DJIA) is one of the stock indices founded by the creators of Wall Street and the Dow Jones Company. This index is used to measure the development of the industrial sector in the U.S. stock market and is also one of the oldest American indices with a long history. To this day, it remains highly representative, widely applicable, functionally prominent, and features a high stock price index. It is also one of the most influential stock price indices in the world.

Reasons for the Importance of the Dow Jones Industrial Average:

1. Representative Selection of Stocks

The stocks selected for the Dow Jones Industrial Average are highly representative. The companies issuing these stocks are influential and well-known within their industries. The emergence of these stocks attracts global attention in the stock market and is closely monitored and chosen by investors worldwide. To maintain this characteristic, Dow Jones frequently adjusts the average index, replacing stocks with more dynamic and representative ones, as some stocks may lose their relevance over time. Since 1928, the industrial stock average index has been recalculated by replacing stocks from over 30 companies, occurring nearly 30 times, with almost one company being replaced every two years.

2. Strong Influence

The published Dow Jones Index is also one of the most representative and influential newspapers in the financial news industry. Daily reports in newspapers detail the sampled average stock numbers, while hourly calculations track the percentage transaction rates and changes of sampled stocks, along with adjustments for post-split average stock prices. During trading hours at the New York Stock Exchange, the average index is published frequently—every half hour.

3. Self-Compilation Capability

The self-compilation capability of its average stock price index has never ceased. It serves as a tool to compare stock markets and economic developments across different periods. The index is highly sensitive to stock market fluctuations and serves as a key reference for observing market trends and making stock investment decisions.

However, since the Dow Jones stock price is a component index, it includes only a small portion of over 2,500 companies, many of which are popular stocks. It does not cover some recently developed sectors, such as service and financial industries, despite being highly representative and favored by the public.