Most indexes, like the S&P 500 and Nasdaq Composite, assign a higher weighting to the largest companies by market cap. For example, Apple has roughly 11 times the market cap of Coca-Cola, so it has a much higher weighting in the S&P 500. But in the Dow, Apple is the 12th highest-weighted company by market cap because the index is price-weighted.

The long history of the venerable Dow Jones Industrial Average dates back approximately 130 years. In that time the Index has changed some of its components 58 times. While this has the appearance of stability,

Chip giant Nvidia will join the Dow Jones Industrial Average, the iconic Wall Street index announced Friday, underscoring the importance of artificial intelligence in the US economy.

The Dow Jones Industrial Average ( ^DJI 0.59%) is making its second major change in 2024. Earlier this year, Amazon ( AMZN -0.89%) replaced Walgreens Boots Alliance. Now, Nvidia ( NVDA -0.84%) is swapping with Intel, and Sherwin-Williams is replacing chemical giant Dow.