The DJIA index’s history stretches all the way back to the late 19th century, when Charles Dow composed his first stock average in 1884. This original index was mostly composed of railroad companies and still survives today as the Dow Jones Transportation Average. The DJIA itself came into existence in 1896, tracking 12 industrial stocks including General Electric and the Laclede Gas Company (today Spire Inc). After the removal of General Electric in 2018, none of the original stocks are still tracked by the DJIA index.
The Dow Jones Industrial Average has been a feature of the US economic landscape for more than a century, and has seen steep rises and falls triggered by major global events throughout that time. After seeing huge growth throughout the 1920s, the DJIA fell more than 90% in the ensuing Great Depression. Markets were volatile in those years and the Dow’s biggest one-day increase still stands on March 15th 1933 when the index rose by 15.34%.
Other major events in the history of the DJIA include its single largest one-day drop, which happened on the 19th October 1987 – commonly referred to as ‘Black Monday’ – when the index fell 22.61%, and the 1997 ‘mini-crash’ when the Dow fell by 7.18%. Despite such setbacks, the DJIA index recorded an annual compound return of 5.3% throughout the 20th century.
In more recent times, The DJIA was heavily impacted by both the attack on the World Trade Center on September 11th 2001, and the financial crash of 2007-08. The index posted strong recoveries from these events, but then again fell sharply when the coronavirus pandemic spread across the world.