The DJIA and S&P 500 are major U.S. stock market indexes, but they are built differently.
| Aspect | DJIA | S&P 500 |
|---|---|---|
| Number of companies | 30 | 500 |
| Weighting | Price-weighted | Market-cap-weighted |
| Coverage | Narrower, blue-chip focus | Broader large-cap market |
Why the weighting matters:
- In the DJIA, a higher stock price has more influence on the index.
- In the S&P 500, a larger company has more influence because weighting depends on market value.
The S&P 500 is usually the better broad benchmark for the U.S. large-cap equity market.