Indices such as DOW, SPX, NASDAQ are falling as a result of a squeeze on tech stocks. Since the start of the year DOW has fallen 5.3%, SPX 13%, NDAQ 27%.

Dow was the least affected index out of all the major indices.Dow has maintained it’s lead over the other indices for quite a while. Since 2000 Dow Jones has been maintaining a huge lead over Nasdaq but in the recent years this lead has been widening rapidly. Out of all the indices Dow Jones is the only one that is not in an official bear market. For a bear market a drop of 20% is required from it’s recent high. Dow Jones being able to maintain such groundbreaking performance shows that it is an index with less risk involved than its peers. Not only has Dow survived the tech squeeze it had also survived the fluctuations in the interest rates given by the Federal Reserve. Throughout the year the interest rate had changed several times and this had resulted in major downturns in the other major indices while it’s damage was kept to a minimum in Dow.

Although Dow Jones might seem appealing to some investors because of it’s apparent safety it is important to mention that it fails to preform well in some situations. In 2020 and 2021 when Nasdaq had spike up 44% Dow had only gone up 7%. So, if one were to look at Dow from an investors perspective it could be said that Dow is a low-risk-low-reward type index compared to the other major indices. It might be true that it doesn’t get affected by market fluctuations as much but this also infers that it doesn’t rise as much when the market is rising.

Sources: The Wall Street Journal, Dow Jones