After four years, the Dow Jones is shaking things up. E-commerce giant Amazon is set to become the newest member of the Dow Jones Industrial Average, replacing drugstore chain Walgreens Boots Alliance. This change, announced by S&P Dow Jones Indices, will take effect on Monday before the market opens.
Not that anyone should be too surprised. Not only is it the largest e-commerce company in the U.S., but it’s also the market leader in cloud services. And then there’s Amazon’s presence in the analog world, which includes freight & logistics operations and the Whole Foods grocery chain, among other endeavors.
Walgreens’ performance and price didn’t fit the Dow’s price-weighted system. Amazon’s more robust profile makes it a more suitable replacement, reflecting the Dow’s evolving role.
The addition of Amazon highlights the Dow’s evolving nature. While traditionally focused on established industrial giants, it now recognizes the growing influence of tech behemoths. This move signifies the Dow’s willingness to adapt to a changing economic landscape, even if its practical impact on fund flows might be limited.
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