The Dow Jones Industrial Average (DJIA) and the S&P 500 are two of the most widely followed stock market indices, but they differ in composition, calculation methods, and purpose.

The Dow Jones, established in 1896, includes 30 large, well-established companies across various industries. It is a price-weighted index, meaning that stocks with higher prices have a greater impact on the index’s movements, regardless of their actual market size. This approach can sometimes distort the index's performance relative to the broader market.

The S&P 500, introduced in 1957, represents 500 of the largest publicly traded U.S. companies, covering a more diverse range of sectors. It is a market-cap-weighted index, meaning companies with larger market capitalizations have a greater influence on the index’s movements. This makes the S&P 500 a more comprehensive measure of the overall U.S. stock market and economy.

The Dow Jones focuses on a small number of blue-chip companies, while the S&P 500 captures a broader picture of the market. Investors and analysts often view the S&P 500 as a better gauge of market health due to its wider scope and market-cap weighting. However, both indices are key barometers of U.S. financial markets.