This is when the Dow Jones Industrial Average will hit 100,000, according to what history has to say

Last week was a story for the iconic Dow Jones Industrial Average (DJINDEXES: ^DJI). The index that was created almost 130 years ago ended the February 6 trading session above 50,000 for the first time.

Investors have watched the Dow transform from a 12-stock, industry-focused index in the late 19th century to one that now includes 30 diverse and time-tested multinational companies. Over the past decade, the Dow has cleared 32 1,000-point milestones, starting at 19,000 and ending, most recently, above 50,000.

Where to invest $1000 right now? Our team of analysts just revealed what they think they are 10 best stocks buy now, when you join Stock Advisor. View stocks »

A New York Stock Exchange trader looking puzzled at a computer monitor. — Image source: Getty Images.

While investing on Wall Street often involves looking to the future, remembering the past can sometimes tell investors what to expect in the coming years.

With the Dow Jones Industrial Average passing a psychologically important level, the question to be asked is: When will this ageless index reach 100,000? While the past cannot guarantee the future, history offers a pretty clear answer, and it may be sooner than you think.

As is often the case when you put your money to work in the stock market, the answer varies by perspective. Using the average annual returns of the Dow as a guideline, we can estimate when it will effectively double from its closing value on February 6.

For example, the Dow fell during the Great Depression on July 8, 1932, to just 41.22. In the more than 93 years since this fund, the index has returned an annual average of 7.89%. If this annual return were to persist, it would take until about March 2035 for the Dow to reach the 100,000 mark.

But if we narrow the lens to an arbitrary period of 50 years, the results change a bit. Over the half-century, Wall Street’s health barometer has moved from 964.81 to its closing value of 50,115.67 on February 6, an annualized return of 8.22%. At this rate, the Dow would reach six-digit status before the end of 2034.

However, things get very interesting when we consider the recent changes made by S&P Dow Jones Indices, which oversees additions, deletions, and updates to the Dow divisor (in the case of stock splits) for the Dow Jones Industrial Average.

Over the past decade, the Dow has soared from 16,204.97 to 50,115.67, with a compound annual growth rate of 11.95%. This above-average rate of return would see the Dow reach the 100,000 mark in February 2032, just six years from now.

These outsized returns over the past decade can be attributed to the fact that S&P Dow Jones Indices modernized the index and incorporated several members of the “Magnificent Seven.” Although Microsoft was added in 1999, some of the newer additions include Apple in 2015, together with Amazon i Nvidia in 2024.

The members of the Magnificent Seven have consistently outperformed every major Wall Street stock index. More importantly, they have well-defined competitive advantages and have not been afraid to spend aggressively on high-growth initiatives and game-changing technology trends. The Dow’s adoption of Wall Street’s most influential companies makes the six-year time frame to reach 100,000 quite doable.

An American flag draped over the New York Stock Exchange, with the Wall St. in the foreground — Image source: Getty Images.

While history has made it abundantly clear that the Dow Jones Industrial Average rises over periods of several decades, predicting short-term directional movements in the index is not as accurate.

But what could really complicate short-term predictions for the Dow is its point calculation method, which differs markedly from the benchmark. S&P 500 (SNPINDEX: ^GSPC) and driven by growth Nasdaq Composite (NASDAQINDEX: ^IXIC).

The S&P 500 and Nasdaq Composite are market capitalization-weighted indexes, meaning that companies with higher market valuations exert more control over point movements. Members of the Magnificent Seven with market capitalizations of trillions of dollars will have more influence than marginal members of the S&P 500 who have comparatively small caps of $7 billion to $10 billion.

This is not the case with the time-tested Wall Street Stock Index, which is weighted by stock price. As implied, it means that a company’s stock price, not its market capitalization, dictates its influence. Although Nvidia is the largest publicly traded company on US exchanges, its share price of $185 only makes it the 20th most influential component of the Dow.

As of the closing bell on February 6, investment banking giant Goldman Sachs (NYSE: GS) and head of construction machinery caterpillar (NYSE: CAT) they were the two most important companies in the Dow. Despite being the 17th and 13th largest members of the index by market capitalization, Goldman Sachs and Caterpillar account for nearly 5,709 and 4,464 Dow points, respectively. That’s 10,173 of the Dow’s 50,115.67 points represented by just two companies.

The ability of the Dow Jones Industrial Average to sustain an annualized rate of return of nearly 12% will depend on the companies with the highest share prices (not necessarily the largest by market capitalization) continuing to outperform. Should Goldman Sachs or Caterpillar do a futures stock split at some point, thereby altering the Dow divisor that converts a company’s stock price into Dow points, the recipe that has worked so well for Wall Street’s ageless index could be disrupted.

As things stand now, the Dow has a realistic path to 100,000 as early as 2032. But if its long-term historical returns come into play, the latter half of 2034 or the first half of 2035 are logical targets for the Dow to break 100,000.

Before you buy stocks in the Dow Jones Industrial Average, consider this:

The Motley Fool Stock Advisor The team of analysts has just identified what they think they are 10 best stocks because investors are buying now… and the Dow Jones Industrial Average was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $443,299!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,136,601!*

Now, it’s worth noting Stock advisor The total average yield is 914%: Outperformed the market compared to 195% of the S&P 500. Don’t miss the latest top 10 list, available with Stock advisorand join an investment community created by individual investors for individual investors.

See the 10 actions »

* Stock Advisor returns from February 10, 2026.

Sean Williams has positions on Amazon. The Motley Fool has positions in and recommends Amazon, Apple, Caterpillar, Goldman Sachs Group, Microsoft and Nvidia. The Motley Fool has one disclosure policy.

This is when the Dow Jones Industrial Average will hit 100,000, according to what history has to say was originally published by The Motley Fool

Source link