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’s all-time high at market close stands at 39,131.53, reached on Feb. 23, 2024. The index’s highest price at any time was the same day, 39,282.28.
In the lead-up to these highs, the Dow had been on a tear, fueled by growing optimism about interest rate cuts and economic recovery. This was in the lead-up to a change in the Dow, with Amazon Inc. (AMZN) replacing Walgreens (WBA), which had only been in the index since 2018 and was the DJIA's worst performer in 2023. Below, we take you through other critical moments in this crucial stock market benchmark.
Key Takeaways
- The Dow Jones Industrial Average (DJIA) hit its record high on Feb. 23, 2024, reaching 39,282.28 points in intraday trading.
- The Dow's all-time high at market close stands at 39,131.53, reached the same day.
- The Dow is one of the most followed equity indexes, tracking 30 large-cap, well-known companies that trade on U.S. stock exchanges.
A Brief History of the Dow
Journalist Charles Dow and his business partner, Edward Jones, established the Dow Jones Industrial Average in 1896 with 12 companies in the industrial sector. The number of companies included in the index increased to 20 in 1916 and then to the current number, 30, in 1928. Since its inception, the Dow has remained among the most frequently discussed and commonly tracked equities indexes.
Notable Milestones for the Dow
The following are some milestones achieved by the Dow Jones Industrial Average. In parentheses, when helpful, we provide the Dow's points as inflation-adjusted to Feb. 23, 2024, for a relative comparing to its record high.
- March 15, 1933: The largest one-day percentage gain occurred during the market turmoil of the 1930s, when the Dow increased 15.34%, up 8.26 points to close at 62.10 (about 1,520 points, inflation-adjusted).
- Oct. 19, 1987: The day of the Dow’s largest one-day percentage drop came to be known asBlack Monday, as the average fell 22.6%. The exact causes of the crash remain a mystery, although program trading may have played a role.
- Jan. 25, 2017: The Dow closed above 20,000 points for the first time.
- March 16, 2020: The Dow crashed amid the COVID-19 pandemic, falling close to 3,000 points in a single day after several drastic changes up and down.
- Nov. 16, 2020: The Dow returned to its pre-pandemic high, jumping to 29,950.44.
- Nov. 24, 2020: The Dowexceeded 30,000 points for the first time, closing at 30,046.24.
- Feb. 23, 2024: The Dow reached its all-time high of 39,282.28.
Dow All-Time Highs
The Dow has consistently hit new highs during the 2010s. The longest bull market in history lasted about 11 years, starting in March 2009 and ending in February 2020.
Many records were set in 2019, thanks in part to trade talks with China that boosted firms in the index. The Dow had 22 record closes in 2019.
The Dow finally broke the 30,000 mark the following year. Uncertainty had been hanging over the markets because of the unprecedented refusal of then-President Donald Trump to concede the election to President-elect Biden. When Trump began the transition process late on Nov. 23, 2020, stocks came roaring back.
The index also had a banner year in 2021. The Dow climbed to 31,522.75 points on Feb. 16, 2021. It hit an all-time high of 34,200.67 points on April 16, 2021. In the autumn, it began to consistently close above 35,000 points, and by the last week in December 2021, it surpassed 36,000 points.
Another big rally started at the end of October 2023. 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. The Dow then climbed above 38,000 in January 2024.
Dow All-Time Lows and Plunges
While the recent decade has shown strong economic growth, leading to plenty of record highs for the Dow, there have been significant plunges as well, both over longer periods and in dramatic single-day or single-moment drops.
Perhaps the most infamous trough was during the Great Depression, in which the Dow lost about 90% of its value over three years. It hit a low of 41.22 in 1932 (about 908 points, inflation-adjusted).
22.61%
The largest single-day drop, percentage-wise, that the Dow has had occurred when the market crashed on Oct. 19, 1987, Black Monday. However, in points, the Dow’s worst day was March 16, 2020, when it fell 2,997.1 points in reaction to the pandemic-era adoption of lockdowns throughout the U.S. and the Federal Reserve slashing interest rates to near zero.
Since the Great Depression, 2007 to 2008 has been the most dramatic period for the DJIA. The market fell more than 50% in just a year and a half because of subprime mortgage and credit crisis that kicked off the Great Recession.
Previously, the Dow had fallen from 11,723 in January 2000 to 9,389 in March 2001, dropping 20% (from 20,520 to 16,434 points, inflation-adjusted). The bout of inflation that followed the COVID-19 pandemic led to another sharp sell-off in 2022. Between Jan. 7, 2022, and Sept. 30, 2022, the Dow declined from 36,231.66 to 28,725.51.
The recession from 1973 to 1975 also led to a falloff for the Dow, which dropped 45% from its 1,051 peak in 1973 to just under 600 in 1974 (about 7,486 and 3,871 points, respectively, inflation-adjusted). The Dow also lost 26.5% during the Cuban missile crisis of 1962.
How Are Companies in the Dow Jones Industrial Average Selected?
The Dow tracks 30 large, publicly ownedblue-chipcompanies trading on the New York Stock Exchange and the Nasdaq. 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.
How Often Does the Dow Jones Industrial Average Change?
When a company undergoes significant changes, such as a merger, acquisition, or substantial shifts in its business model, or when there's a need to better represent the current state of the economic sectors, adjustments are made. These changes are not done often to ensure the index's stability and continuity.
What Are the Drawbacks of the Dow Jones Industrial Average?
Since the Dow tracks just 30 large-cap U.S. companies, some critics argue that it is too narrow to represent the state of the overall U.S. economy. Given its large-cap focus, the roster of companies included in the Dow fails to include companies of other sizes. Most market observers think the is a much better representation of the economy, as it includes 500 companies and draws more widely from different sectors.
How Do I Invest in the Dow Jones Industrial Average?
While you can't directly buy shares in the market index, you can invest in the DJIA through index funds and exchange-traded funds (ETFs) such as the SPDR Dow Jones Industrial Average ETF Trust (DIA). These funds track the DJIA through a similar composition and weighting of stocks.
What Do the Points in the Dow Jones Industrial Average Mean?
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. This method, though, is imperfect and provides only a rough snapshot since it doesn't account for dividends accrued, different inflation effects across economic sectors, or changes in the index's weighting or composition over time.
The Bottom Line
The Dow posted its all-time high during intraday trading on Feb. 23, 2024, reaching a peak of 39,282.28 points. The highest close occurred the same day when the index closed at 39,131.53 points. The peak was led in part by a relaxation of concerns that the Federal Reserve would keep interest rates high because of inflation, thus dampening economic activity.
