S&P Dow Jones Indices, manager of the Dow Jones Industrial Average, says that on June 29, Alphabet, Inc., the parent company of Google, will be added to the list and Verizon will be removed.
This is the first change to the list since 2024when Dow (no relation) and Intel were eliminated to make room for Nvidia and Sherwin-Williams. This is a telling change, as a paint company isn’t exactly the brightest addition. The stated goal of this new change is to expose the average to market dynamism rather than to compile a list of important companies. CNBC says The average seeks to reflect market activity related to artificial intelligence, cloud and advertising.
However, with only 30 members, the Dow feels like a highly selective club with a blue-chip seal of approval, perhaps even more so than its cousin, the S&P 500, which has, yes, 500 members.
It is worth keeping in mind, however, that there are no rules for inclusion in the index, so these questions may seem quite arbitrary.
It’s also worth remembering that the average is weighted by share price rather than market cap, which increases arbitrariness. Historically, this means that large swings in Goldman Sachs’ stock price have a great impact on the averagebut only because the price of an individual Goldman Sachs share is very high compared to other companies. One Goldman Sachs share, at the time of writing, It costs $1,089.29, while one share of Alphabet, Inc. will cost you just $348.17 (and is up about 1.7% after the Dow announcement).
But the change is not purely symbolic. Anyone in possession of common financial products such as State Street SPDR Dow Jones Industrial Average ETFor the leveraged ProShares UltraPro Dow30 They will soon have a part of Google, whether they want it or not.
