
Amazon to Join Dow Jones Industrial Average, Replacing Walgreens Boots Alliance

In a historic move, Amazon is set to join the prestigious Dow Jones Industrial Average, marking a significant shift in the composition of the 30-stock index. The announcement by S&P Dow Jones Indices has effectively positioned Amazon alongside industry giants Apple, Walt Disney, and Walmart in this influential market indicator.
Replacing Walgreens Boots Alliance, Amazon's addition to the Dow is slated to take place before the commencement of trading on Monday. This strategic alteration comes in the wake of Walmart's decision to conduct a 3-to-1 stock split, prompting a necessary adjustment in the index's composition due to the price-weighted nature of the Dow.
The decision to include Amazon in the Dow comes concurrent with Walmart's stock split, which has instigated a ripple effect on the weighting of the index's constituent stocks. Amazon's entry, coupled with Walmart's stock split, is poised to significantly impact the relative weightings of these companies within the Dow.
S&P Dow Jones Indices has indicated that Amazon's inclusion in the index will elevate its weighting to the 17th position among the 30 stocks. Meanwhile, Walmart's weighting will experience a notable decline from 17th to 26th place. Notably, UnitedHealth Group will uphold its position as the most heavily weighted stock in the index.
Amazon's incorporation into the Dow reflects the growing dominance of the "Magnificent Seven" tech companies, comprising Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. These companies, underpinned by the surge in artificial intelligence technology, have played a pivotal role in propelling market gains, particularly within the S&P index.
Market performance
Analysts have underscored the impact of the Magnificent Seven in driving market performance, with their influence significantly contributing to record highs within the S&P amidst economic uncertainties. While the Dow has traditionally lagged behind the S&P and Nasdaq due to its limited exposure to tech stocks, the inclusion of Amazon marks a significant step towards aligning with the market trends driven by these tech behemoths.
Amid discussions surrounding the market influence of the Magnificent Seven, Nigel Green, CEO and founder of the deVere Group, has emphasized the transformative nature of these tech companies in shaping the economy. Green has rejected notions of a speculative bubble, instead highlighting the fundamental impact of these companies in reshaping industries and driving technological advancements, particularly in the realm of artificial intelligence.
In a parallel development, ride-sharing service Uber Technologies is poised to join the Dow Jones Transportation Average, taking the place of JetBlue Airways. This strategic adjustment seeks to provide the index with exposure to the burgeoning ride-sharing industry, with Uber's inclusion anticipated to bolster the representation of this sector within the index.
Following these developments, Amazon's shares surged by 1.4% in after-hours trading, underscoring the market's positive reception of the announcement. Similarly, Uber's stock also experienced a 1.1% increase, reflecting the market's approval of the company's inclusion in the Dow Jones Transportation Average.
The inclusion of Amazon in the Dow Jones Industrial Average and Uber in the Dow Jones Transportation Average signifies a pronounced shift in the composition of these influential market indicators, reflecting the evolving landscape of the economy and the increasing influence of tech and e-commerce companies. These strategic adjustments are poised to reshape the market dynamics and elevate the representation of key sectors within these indices, underscoring the ever-changing nature of the global economy.
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