S&P Dow Jones Indices, the 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 2024, when Dow (no relation) and Intel were removed to make room for Nvidia and Sherwin-Williams. That’s a telling change, since a paint company isn’t exactly the most scintillating addition. The stated purpose of this new change is to expose the average to market dynamism more than to compile a list of important companies. CNBC says the average is seeking to reflect market activity related to AI, cloud, and advertising.
Nonetheless, with only 30 members, the Dow does feel like a highly selective club, and a stamp of blue-chip approval—perhaps even more than its cousin, the S&P 500, which has, yeah, 500 members.
It’s worth keeping in mind, however, that there are no rules for inclusion in the index, so these matters can seem pretty arbitrary.
It’s also worth remembering that the average is weighted by stock price instead of market capitalization, which adds to the arbitrariness. Historically, this means big changes to the stock price of Goldman Sachs have a huge impact on the average, but only because the price of an individual share of Goldman Sachs is so high compared to the other companies. One share of Goldman Sachs, as of this writing, costs $1,089.29, while one share of Alphabet, Inc. will set you back a mere $348.17 (and it’s up about 1.7% in after hours trading off the Dow announcement).
But the change isn’t purely symbolic. Anyone in possession of common financial products like the State Street SPDR Dow Jones Industrial Average ETF, or the leveraged ProShares UltraPro Dow30 will soon be holding a little bit of Google whether they intend to or not.