Amazon.com is set to join the Dow Jones Industrial Average, a prestigious index comprising 30 major stocks, alongside companies like Apple, Walt Disney, and Walmart.
The e-commerce giant will replace Walgreens Boots Alliance in the Dow before the start of trading on Monday, as announced by S&P Dow Jones Indices on Tuesday.
This change was prompted by Walmart’s decision to undergo a 3-to-1 stock split, which will reduce its stock’s weighting in the index. The Dow Jones Industrial Average is a price-weighted index, meaning stocks with higher prices are given more weight in the calculation.
Amazon (Credits: Statesville Record )
Amazon, headquartered in Seattle, will enter the Dow on the same day that Walmart executes its stock split. According to S&P Dow Jones Indices, this adjustment reflects the evolving nature of the American economy and will increase exposure to consumer retail and other business sectors in the DJIA.
The addition of Amazon, the removal of Walgreens, and Walmart’s stock split will impact the weighting of the Dow stocks. Following the changes, Amazon’s weight in the Dow will rank 17th out of the 30 stocks, while Walmart’s weight will decrease from 17th to 26th.
UnitedHealth Group will remain the most heavily weighted stock in the index. This move underscores the dynamic shifts in the U.S. economy, with tech and e-commerce gaining prominence in major stock indices.
