Dow vs S&P 500 vs Nasdaq
The three numbers every market summary recites measure different things in different ways. Here is how they actually differ — in construction, and in measured results computed from daily closing data.
Three indexes, three philosophies
The Dow Jones Industrial Average is 30 hand-picked blue chips weighted by share price — a company trading at $700 a share moves the index twice as hard as one at $350, regardless of which business is bigger. The S&P 500 is roughly 500 large companies weighted by market value, which makes it the default proxy for "the U.S. stock market" and the benchmark most professional money is measured against. The Nasdaq Composite is every company listed on the Nasdaq exchange — thousands of them — also value-weighted, and so dominated by its giant technology names that it behaves like a leveraged bet on the sector.
Those construction choices, not the companies themselves, explain most of the differences you see in the table below. The Nasdaq's tech concentration buys higher long-run returns at the cost of higher volatility and deeper drawdowns. The Dow's blue-chip tilt and its committee-curated membership make it steadier but historically slower. The S&P 500 sits in between, which is exactly why it became the standard.
The measured differences
| Index | Level | YTD | 1 yr | 5 yr | 10 yr | Volatility (1y) | Deepest 10-yr drawdown |
|---|---|---|---|---|---|---|---|
| DJIA Dow Jones Industrial Average | 53,185.90 | +10.66% | +16.78% | +50.41% | +189.04% | 12.49% | −37.09% |
| S&P 500 S&P 500 | 7,686.14 | +12.28% | +18.98% | +69.95% | +254.05% | 12.76% | −33.92% |
| Nasdaq Nasdaq Composite | 26,370.89 | +13.46% | +22.91% | +72.82% | +405.85% | 18.43% | −36.40% |
Price returns only (dividends excluded), computed from daily closes through August 31, 2026. Volatility is the annualized standard deviation of daily returns over the last 252 sessions.
Ten years on one axis
Index levels are arbitrary — 52,000 vs 6,000 vs 22,000 says nothing — so the chart rebases all three to 100 at the start of the period. What it shows is the compounding cost of the Dow's conservatism during a tech-led decade, and also how much rougher the Nasdaq's path was to its higher destination.
How closely do they move together?
Over the last year of trading, daily moves in the Dow and the S&P 500 have a correlation of 0.83 — they usually rise and fall together. The Dow's correlation with the Nasdaq Composite is lower at 0.69, reflecting the Dow's lighter weighting toward the technology names that dominate the Nasdaq (the S&P 500 and Nasdaq correlate at 0.96). Practically, this means the Dow can lag on days when megacap tech rallies, and hold up better when it sells off.
Which one should you actually watch?
It depends on the question you're asking. "How did the market do today?" — the S&P 500 is the most representative single answer, covering about 80% of U.S. market value. "How are established, dividend-paying industrial-economy companies doing?" — that is the Dow's actual niche, and divergence between the Dow and the Nasdaq is a quick read on whether the day's story was old-economy or new-economy. "What's happening in tech and growth?" — the Nasdaq. The Dow's greatest asset is its 130-year continuity: no other index lets you put 1929, 1987 and 2020 on one chart. That's why it persists in headlines despite its quirky construction — a construction we take apart, with today's actual numbers, in how the Dow is calculated.
All figures on this page are price returns excluding dividends. Dividends flatter the Dow slightly relative to the Nasdaq, since Dow companies pay materially higher yields — the gap in total-return terms is a little narrower than shown.