What Is the Dow Jones Industrial Average DJIA All-Time High?

If it is a mixed bag with some companies doing well and others slipping a little, the DJIA pretty well remains level. The assumption is that smaller companies and those not included in the Dow will experience similar stock movements. In this way, the DJIA is taken as an expression of how the economy is doing. “Still, this is a great reminder of how far we’ve come. Find out about the record-breaking highs of the DJIA and the events behind its growth.

Record Highs Set in 2014

• That means companies with higher stock prices move the Dow more, even if they aren’t the largest by market value.
• The Dow Jones industrial average finished above 40,000 for the first time on Friday afternoon, doubling where the index hit shortly after Donald Trump became the 45th president.
• For instance, a company may be removed from the index when its market capitalization drops because of financial distress.
• The most recent all-time-high record (as of this writing) was on Jan. 4, 2022, when it closed at 36,799.65.
• These actions artificially raised their earnings per share and the prices of their remaining outstanding stocks (stocks which are still held by shareholders).

The Dow Jones Industrial Average hit 10,000 for the first time in March 1999. The DJIA then hit 11,750 in January 2000, before falling to below 7,200 in October 2002 after the dot-com crash. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

What 30 stocks are in the Dow Jones industrial average

So, a higher percentage move in a higher-priced component will have a greater impact on the final calculated value. Initially, Charles Dow used a simple average for the 12 component stocks. However, as mergers and stock splits occurred, this method became ineffective. The Dow Jones Industrial Average (DJIA) is a stock market index that tracks 30 major public companies listed on the New York Stock Exchange (NYSE) and Nasdaq.

Dow All-Time Highs

The Dow Jones Industrial Average, also known as the Dow or DJIA, tracks 30 large, well-known companies that trade on the New York Stock Exchange and Nasdaq. The Dow kept hitting record highs in late 2024, reaching over 45,000 in December of that year. Companies that become less relevant are replaced with those that better reflect current trends. For instance, a company may be removed from the index when its market capitalization drops because of financial distress. In the early 20th century, the performance of industrial companies was typically tied to the overall growth rate in the economy.

• BrightFunded operates on a 2-step evaluation model to identify skilled traders.
• Kimberly Amadeo has 20 years of experience in economic analysis and business strategy.
• The CME FedWatch Tool shows investors still expect the Federal Reserve to cut interest rates twice by the end of the year.
• Investors worried that China’s yuan devaluation and the uncertainty over the Fed’s rate increase would push the index further downward.

Criticisms of the Dow Jones Industrial Average

These actions artificially raised their earnings per share and the prices of their remaining outstanding stocks (stocks which are still held by shareholders). Because of the price-weighted calculation method, a $1 change in the price of a stock in the DJIA doesn’t equate to one point in the index since that depends on the Dow divisor at the time. As such, point moves are a way to measure the relative change in the index’s value. That said, when comparing the value of the DJIA over time, many financial sites, as we have done above, use an inflation-adjustment calculator such as the U.S. Bureau of Labor’s CPI since this gives the relative change over time.

As one of the oldest and widely followed Cfd trader indexes, it’s a key indicator of the U.S. economy. Investors and analysts use the Dow to gauge market trends and economic confidence. Changes in the index’s composition reflect shifts in the economy, showcasing the evolution of leading industries and corporations.

It tracks the movements of thirty publicly traded companies – for this reason, it is sometimes called the Dow 30. Collectively, these are some of the biggest, most prominent companies in the United States. Conversely, an encouraging drop in inflation reported earlier this week helped to fuel this latest rally.

It hit a low of 41.22 in 1932 (about 908 points, inflation-adjusted).

When answering what is the highest the Dow Jones has ever been, it’s essential to recognize that the market has gone through both ups and downs, but continues to grow over time. The Dow’s activity broke new records in terms of downward movement in 2009. While it wasn’t as dramatic as the Great Depression, the drop happened much more quickly. After recovering from its Great Depression level, the Dow continued to be affected by several recessionary periods and crises leading up to the 2009 downturn. A November streak occurred after Donald Trump’s presidential win on Nov. 8. Traders were confident in a business-friendly Republican president.

The most recent all-time-high record (as of this writing) was on Jan. 4, 2022, when it closed at 36,799.65. Join MasterFunders today and start your trading career with real backing. To account for stock splits and changes in the lineup, the Dow uses a special number called the index divisor. This lets the index stay consistent even as companies come and go.

Unlike the S&P 500, the Dow isn’t a weighted average and doesn’t represent market cap. Instead, it’s the sum of all share prices divided by the divisor, meaning a one-point change in any stock moves the index by the same amount. That said, the way the DJIA is calculated has changed a lot over the years. Today, it includes 30 companies and it is no longer reported as an average of the total share prices of the stocks divided by the number of stocks included in the index. In conclusion, the DJIA reached its all-time high of 40,051.05 points in May 2024.

Learn more about what a prop firm is and how it can help you trade bigger during record-breaking market cycles. Through much of 2022 and 2023, investors were cautious and bearish about equity markets as inflation rocketed. Then, in the last few months of 2023, investors began piling back in as hopes grew that interest rates would soon be cut and a nasty recession averted. By the end of 2023, the previous high, registered in January 2022, had been surpassed, and the 37,000 mark had been breached. Stocks with higher share prices are given greater weight in the index.

When Did the Dow Jones Industrial Average Begin?

The Dow Jones Industrial Average (DJIA) tracks thirty of America’s biggest and most established companies, acting like a quick temperature check of the U.S. economy. Other indices tend to give a more representative picture, so most fund managers and investors prefer to look at them. Here’s a look at each period where the Dow Jones industrial average doubled since the index topped 1250 for the first time in September 1983. On Aug. 17, 1998, Russia devalued the ruble and defaulted on its bonds. By Aug. 31, the Dow had fallen 13%, from 8,714.64 on Aug. 18 to 7,539.06 on Aug. 31. The Long-Term Capital Management hedge fund almost collapsed, threatening to push its banking investors into bankruptcy.

This historic peak came after years of growth, economic recovery, and optimism in the market. By understanding the events and factors behind this achievement, we can better appreciate the significance of this record-breaking moment in stock market history. Record highs are driven by a mix of economic growth, lower inflation, strong corporate earnings, and investor confidence. Fed policy plays a major role, lower interest rates often push the Dow higher.

Record Highs Set in 2020

If the stock market or a share price moves on the word of someone who follows the Dow, you are impacted so it is good to pay attention to how the DJIA is moving. But the historic peak was delayed by strong economic news, an upturn in March inflation data and statements from Fed officials suggesting interest-rate cuts wouldn’t be coming soon. Although the DJIA is currently at an all-time high, it hasn’t always been smooth sailing. For example, during the Great Depression in the 1930s, the Dow dropped dramatically, losing nearly 90% of its value. More recently, in March 2020, the Dow plunged almost 3,000 points in a single day due to the COVID-19 pandemic, marking one of the worst days in its history. The index closed above 18,000 on Dec. 23, and then closed its high for the year at 18,053.71 on Dec. 26.

The selection is not based on strict quantitative criteria but rather on the decisions of the editors of the Wall Street Journal. Companies are chosen based on their reputation, growth, and relevance to the economy, with the aim of reflecting the overall health and trends of the industrial sector of the U.S. economy. Many records were set in 2019, thanks partly to trade talks with China that boosted firms in the index. Click here to see the green days for 7 major stocks today. There are only 30 stocks included in the index – compared to more than 5,300 common stocks between the NASDAQ and the New York Stock Exchange (NYSE). Further, when all the companies in the Dow are growing, it could be that the economy is strong.