Privacy Policy
Stock Market
Market Education
Federal Reserve & Rates
Capital Markets
IPO & Public Offerings
Economy & Macro
Energy & Commodities

market cap weighted

Price-Weighted vs. Market-Cap-Weighted: How Stock Indices Work

September 16, 2026 by Bruno

AI-generated editorial image: A vintage brass balance scale with precision cylinder weights resting on a walnut table in soft morning light.

Learn how price-weighted and market-cap-weighted indices work, how the Dow Divisor functions, worked math examples, and the key distortions of each method.

Categories Capital Markets, Market Education Tags dow jones industrial average, index weighting, investing basics, market cap weighted, sp 500, stock market

RobinhoodREFERRAL OFFER

Get up to $200joining Robinhood

$

Join Robinhood ↗

Referral link. Eligibility and offer terms apply. See Robinhood for current reward details. Investing involves risk.

Search