Which U.S. stock index was created in 1896 by Charles Dow and fell during the Panic of 1907?

The Dow Jones Industrial Average was created in 1896 by Charles Dow and fell during the Panic of 1907.

Charles Dow introduced the industrial average on May 26, 1896, as a benchmark for major American industrial companies. It originally contained 12 stocks, and the index later expanded to 30 constituents. Its name combines Dow’s name with that of Edward Jones, his business partner.

The Panic of 1907 was a severe financial crisis involving bank runs, falling stock prices, and a credit contraction. The crisis was eventually contained partly through the efforts of financier J. P. Morgan and other private bankers, helping prompt later support for a central banking system.

The Dow is price-weighted rather than market-capitalization-weighted. That means a stock’s share price, not the company’s total market value, has the direct influence on its index weight. The S&P 500 uses a different approach.