What Are Points in the Stock Market?
When you turn on the financial news, you’ll likely hear phrases like “the Dow Jones Industrial Average gained 200 points today” or “the S&P 500 dropped 50 points in trading.” But what exactly are these points, and why do they matter to investors?
Our collective obsession with stock market points is a relatively recent phenomenon, dating back only to the 1960s. Since then, it has grown into a daily ritual, with news media often presenting point moves in the markets as the pulse of the economy. This can be misleading, as other key economic indicators like unemployment, inflation, and housing starts are updated monthly, providing a more comprehensive, albeit less frequent, economic snapshot.
Key Takeaways
- When you hear a stock has…
