The US30 is otherwise known as the DJ30 or just Dow and regarded as one of the world’s most highly-rated indices. Charles Dow, a Wall Street Journal editor, created the index in 1896 and coined its name with his business partner, Edward Jones. US30’s primary objective is to indicate the U.S. economy’s general health and the direction of trends. Given that its component firms are some of the world’s largest companies, the index gives an insight into the strength of the global economy.
The US30 is a price-weighted stock market index that tracks the performances of 30 publicly traded blue-chip companies in the New York Stock Exchange (NYSE).
This piece will explore the US30 index and its impact on the American economy and the financial markets. We’ll also find out the US30 companies and how to trade the index like a pro.
There are a couple of factors that influence the price of the DOW. If you trade this index, you’d want to consider these critical economic data.
- Unemployment or inflation,
- Geopolitical events, and
- The declarations of the Federal Open Market Committee (FOMC)
The world’s major indices, including the S&P 500 and the NASDAQ Composite Index, are capitalization-weighted, unlike the US30. The U.S. Wall Street 30 index is price-weighted and can dictate the movement of the whole stock market.
What Companies Are in US30?
The U.S. Dow Jones 30 Index is a derivative of the Dow Jones Transportation Average. It is the country’s second-oldest stock market index. At first, it comprised 12 large American companies, including North American, U.S. Rubber, Tennessee Coal and Iron, American Cotton Oil, American Tobacco, Chicago Gas, American Sugar, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, and U.S. Leather. The Dow increased to 30 stocks in 1928.
Today, it includes some of the biggest companies, not just in the U.S. but in the world. Dow Jones 30 companies range from various sectors, including healthcare, consumer goods, and technology.
A list of companies in the US30 as of August 2020 is shown below.
|1||Salesforce||IT/ cloud-based software|
|2||Procter & Gamble||Personal Products|
|6||IBM||IT Consulting & Other|
|8||American Express||Consumer Finance|
|10||Boeing||Aerospace & Defense|
|12||Caterpillar||Construction Machinery & Heavy Trucks|
|13||JPMorgan Chase||Diversified Banks|
|14||Walt Disney||Movies & Entertainment|
|15||Johnson & Johnson||Pharmaceuticals|
|16||Walmart||Hypermarkets & Super Centers|
|17||Home Depot||Home Improvement Retail|
|20||Honeywell||Aerospace/ Building technologies|
|21||Verizon||Integrated Telecommunication Services|
|22||Chevron||Integrated Oil & Gas|
|23||Cisco Systems||Communications Equipment|
|25||UnitedHealth Group||Managed Health Care|
|26||Goldman Sachs||Investment Banking & Brokerage|
|27||Nike||Apparel, Accessories & Luxury Goods|
|28||Visa||Data Processing & Outsourced Services|
|29||Apple||Technology Hardware, Storage & Peripherals|
|30||Walgreens Boots Alliance||Drug Retail|
What Time Does US30 Open and Close?
The U.S. stock exchanges are open Monday to Friday from 9:30 a.m. to 4 p.m. Eastern Time, four hours behind GMT. As stated earlier, the US30 index is price-weighted; hence, the index value significantly changes when the markets are open and stock prices are moving. The Dow trading hours are available through CFD and futures contracts that stay open when U.S. markets are closed. The time frame in which you want to trade is the first step in developing your CFD trading plan.
During closed hours, the closing prices of the most recent stock market session for the 30 Dow stocks form the basis of the index’s value. The DJIA Divisor calculates the US30 index by dividing the total sum of all prices of all 30 stocks that it represents.
How to Trade US30?
In general, trading calls for a good strategy and proper risk management regardless of the instrument. The US30 index CFD trading could prove a profitable venture and, at other times, a cumbersome index to trade. If you are looking to succeed in the stock market, risk management should be a key component of your strategy. It is not just a determinant of a trader’s failure or success in the forex market; it also applies to stocks or indices trading. Consequently, a trader’s primary objective is to devise a means of cutting losses short while increasing their winning potentials. The use of technical indicators in your strategy of trading the Dow can yield much good for your portfolio. Profitable trading requires technical indicators that include:
- Trend indicators like moving average
- Patterns like breakout and reversals
- Price action
- Support & resistance levels
All the indicators above are crucial to trading; however, not all may be suitable for your trading goals. It is best you look out for indicators that fit your technique and objectives.
Indices are just benchmarks and cannot be purchased. You can gain exposure to the market by using Exchange Traded Funds (ETFs) and Contracts for Differences (CFDs). Index CFDs are usually used for short-term strategies, while Index ETFs usually yield smaller gains over a more extended period. CFD is a financial derivative product that allows a trader to profit on an asset’s price movement without the obligation of owning the underlying asset.
US30 companies are some of the world’s largest brands, and that calls for profitable trading opportunities. Investors worldwide are always on the hunt for diversifying their portfolios, and the US30 is one flexible way to do so. They take advantage of the index’s large-cap organizations with strong growth possibilities and volatility. The Wall Street 30 index offers excellent liquidity. It has a long history, enabling investors to analyze price movements quickly and has been a reliable benchmark since the financial crisis in 2008.
Best MT5 Broker for US30
The rise of powerful trading platforms with cutting-edge features has ensured ease of trade in recent years. If you want to trade the U.S. 30, you should look out for an FCA authorized and regulated broker. In today’s market, the MetaTrader 5 (MT5) is offered to traders by many world-leading brokers. When choosing a broker, you’d want to compare the top MT4 brokers to ensure you get the best pricing, tools, analysis, and security.
Wall Street 30 index has remained one of the world’s oldest and leading benchmarks with high liquidity. Its constituent companies are household names across different sectors in the global economy. The index’s value is a subject of Macro, economic, and technical factors. Examples of these factors include Gross Domestic Products (GDP), unemployment levels, Quantitative Easing, and rate movements.