Take a look at the Dow Jones Industrial Average over the course of its history and you also have a reliable history of the U.S. stock market. Its peaks and valleys shed light on the workings — and volatility — of the global economy. Stock market gains since the 2008 financial crisis were mediocre in https://www.forexbox.info/best-agriculture-stocks-the-very-best-stocks-for/ volume. Only three days traded more than 200 million shares, a level similar to the late 1990s. On Monday, Sept. 15, 2008, Lehman Brothers Holding, Inc. (an investment bank) declared bankruptcy. On Wednesday, panicky bankers withdrew $144 billion from money market funds, almost causing a collapse.
- But both could be long-term winners as more businesses seek productivity gains through automation.
- Additionally, it was slightly less volatile than the broader S&P 500, as evidenced by its 10-year beta of 0.95.
- Alternatively, investors could take a more conservative approach and buy shares of the SPDR Dow Jones Industrial Average ETF (DIA -0.81%).
- The chart below shows four of those closing records, as they increase by the thousand.
- It began on Jan. 4, when the Dow closed 160 points lower as investors worried about a slowdown in China’s economic growth.
- Interactive chart of the Dow Jones Industrial Average (DJIA) stock market index for the last 100 years.
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On that day, it closed at 7,286.27, a 37.8% decline from its peak. No one knew if a new bull market had begun until the Dow hit a higher low on March 11, 2003, closing at 7,524.06. 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.
Recession of 1953
Following the Great Recession, it took about five years for the stock market to recover. In 2020, the Dow set a record high of 28,868.80 on Jan. 2 and another record a week later. After experiencing three of the biggest drops in history during the spring of 2020, it broke 30,000 on Nov. 24 and ended the year at a record high of 30,606.48.
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. However, returns have varied dramatically between past bull markets, so investors would do better to benchmark against a different metric. Specifically, the Dow Jones returned about 9% annually over the past four decades, and its performance will likely be similar over the next four decades.
How Often Does the Dow Jones Industrial Average Change?
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. The Dow tracks 30 large, publicly owned blue-chip companies 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.
A bull market, or a bull run, is an extended period of rising stock prices. A bull market is the inverse of a bear market, which is a downward trending stock market. By Jan. 20, it closed at 15,766.74, as investors panicked over plummeting oil prices, the devaluation of the yuan, and turmoil in China’s stock market. The records set in the fall were the first ones since the Dow reached 26,616.71 on Jan. 26, 2018. After hitting the Jan. 26 peak, the Dow went into free fall, dropping 4% the next week.
A bet on the Dow over the Nasdaq is a bet on proven strength and stability instead of potential growth. For example, if you’re looking for value and income over growth, you may not want to invest in a company like Salesforce at all. If you do want some growth and are willing to take on more risk, you may want to avoid stocks like Verizon Communications and Walgreens Boots Alliance. Instead of buying a Dow ETF, you can pick your 10 favorite Dow stocks and buy a share of each to create your own mini Dow portfolio.
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.
1991 Recession
If you think about the industries that have contributed to economic growth over the last decade, a lot of them are tech-related. Just think about how much phones have evolved and all the industries and companies that have benefited. Or e-commerce, streaming, cybersecurity, cloud and software infrastructure, 8 bear market trading strategies to keep on hand semiconductor innovations, mobile banking, electric vehicles, the energy transition, and more. These are just some of the trends that have driven growth in the Nasdaq more than the Dow. Many records were set in 2019, thanks in part to trade talks with China that boosted firms in the index.
Record Highs Set in 2016
At recent prices, the SPDR Dow Jones Industrial Average ETF returned 473% over the last two decades, or 9.1% annually. Additionally, it was slightly less volatile than the broader S&P 500, as evidenced by its 10-year beta of 0.95. The index fund bears https://www.day-trading.info/how-to-remove-pattern-day-trader-status-how-to-day/ a below-average expense ratio of 0.16%, meaning the annual fee on a $10,000 portfolio would be $16. A November streak occurred after Donald Trump’s presidential win on Nov. 8. Traders were confident in a business-friendly Republican president.
After the Dow Jones Transportation Index, it is the second oldest U.S. stock market index still in use. It hit two of them in the first few weeks in January, closing above 25,000 on Jan. 4. The index breached 26,000 on Jan. 17, then continued on to set 15 closing records in the rest of 2018.
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. Learn all about how the classification system that separates the stock market into 11 sectors can help investors understand the different sectors of the economy. The Dow Jones stock market index (also known as the Dow or DIJA) tracks 30 large, blue-chip companies on the New York Stock Exchange and Nasdaq.
