Which US stock index was created in 1896 and became a key measure during twentieth-century market crashes?

The Dow Jones Industrial Average was created in 1896 and became a key measure during twentieth-century market crashes.

Charles Dow and Edward Jones developed the average through their financial journalism business. The first version of the industrial average contained 12 companies and was published on May 26, 1896. It was designed to summarize the movement of important industrial businesses at a time when manufacturing and railroads were central to the US economy.

The Dow later expanded to 30 components and became one of the world’s best-known stock indexes. Newspapers and broadcasters frequently use its daily movement to describe major crashes, including the 1929 collapse and the 1987 Black Monday decline.

The Dow is a price-weighted index, meaning companies with higher share prices have greater influence than companies with lower share prices. That differs from the market-capitalization weighting used by indexes such as the S&P 500. Despite its historical importance, the Dow represents only a small selection of US companies.