Glossary

Price-Weighted Index

An index that adds up its members' share prices and divides by a divisor, so a stock's weight depends on its price, not on the company's value. The Dow Jones Industrial Average is the best-known example: with a divisor of about 0.163 in October 2026, each $1 move in a member was worth about 6.1 points, which is why Caterpillar's $17.05 drop cost the Dow about 105 points on October 23, 2026.