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Archaic Dow Index Signals Trouble Ahead for Stock Market
9 Aug
Summary
- Dow Jones Industrial Average is an archaic, price-weighted index
- S&P 500 has notched nearly a dozen 52-week highs in 2025
- Diverse Dow stocks exposed to tariffs and global economy are struggling
The stock market is facing a concerning trend as the Dow Jones Industrial Average, an archaic and price-weighted index, signals potential trouble ahead. While the more widely followed S&P 500 index has notched nearly a dozen 52-week highs so far in 2025, the Dow has finished lower for 8 of the last 11 trading sessions.
The Dow's struggles are particularly noteworthy, as the index is off about 2.5% from its 52-week high reached on December 24, 2024. In contrast, the S&P 500's last 52-week high was recorded just last month, on July 31, 2025. This divergence suggests that the market may be stalling, with a diverse range of sectors represented among the Dow's worst-performing stocks.
The seven worst-performing Dow stocks on the day contributed 67% of the index's entire loss, with Salesforce, Caterpillar, Microsoft, JPMorgan Chase, Goldman Sachs, Visa, and UnitedHealth Group all struggling. These companies are all exposed to the impact of tariffs and the global economy, which have been a significant flash point for the market in recent months. As investors grow increasingly concerned about these factors, keeping a close eye on these key Dow components will be crucial.
