How is the value of the Dow Jones Industrial Average calculated?
Most stock market indexes are weighted by market capitalization -- equal to share price times the number of shares outstanding. But the Dow Jones Industrial Average is price-weighted.
The value of the Dow Jones Industrial Average is calculated by determining the average value of the stock prices of the 30 listed companies. However, calculating that average value is not as simple as totaling the 30 stock prices and dividing by 30.
Mergers, spinoffs, stock splits, and other developments complicate the arithmetic and require a committee to formally determine a "Dow divisor" -- the denominator by which the sum of the 30 share prices is divided. As of May 2026, the Dow divisor was 0.162423. Using this divisor, you can calculate the value of the Dow Jones Industrial Average by adding up the share prices of all 30 Dow companies and dividing that amount by 0.162423.
Any change in the share price of any Dow-listed company affects the value of the index equally, in accordance with Charles Dow's original vision. But it's important to realize that, on a percentage basis, the movements of the highest-priced stocks have the greatest impact on the index's value.
For example, the highest-priced stock on the Dow in May 2026 was Goldman Sachs, trading at $948.47. The lowest-priced stock was Nike, trading at $41.88. Since Goldman's stock price is more than 20 times greater than Nike's, Nike's share price would have to change by more than 20% to have the same impact on the Dow as a change of just 1% in the price of Goldman stock.
