Why are Amazon and Uber going to the Dow Jones?

🛍️ What’s going on with Amazon?

The Dow Jones Industrial Average (DJIA) is undergoing a makeover.

Because of the changing landscape of the American economy, Amazon will replace drugstore chain Walgreens.

This change wasn't just random.

It was triggered by Walmart's upcoming 3-for-1 stock split, which would have reduced Walmart’s weight in the price-weighted index (Companies with higher stock prices have a bigger impact on the index).

💻️ The DOW wants (and needs) more tech

To keep up the balance and show the growing importance of technology in the economy, Amazon - with its soaring stock price, was chosen as the replacement.

• The Dow has lagged behind other major indexes like the S&P 500 and Nasdaq in recent years.

• Analysts say it’s due to the Dow's lack of high-growth tech companies like Apple, Microsoft, Meta, etc.

• The changes represent a change for the American economy where technology is a must for all sectors.

Adding Amazon directly addresses this gap, bringing the Dow closer to mirroring its more successful big brothers.

🚗 Uber in the DOW

But the tech makeover isn't limited to the Dow.

The Dow Jones Transportation Average (which are 20 companies involved in the transportation sector) is also getting a tech upgrade: Uber.

Ride sharing service Uber will replace JetBlue Airways. The ride sharing company just posted $1.4 billion in earnings last quarter.