Nvidia replaces Intel: A significant change in the Dow Jones

The American chip manufacturer Nvidia is causing a stir in the financial world: The company will replace Intel in the prestigious Dow Jones Industrial Average. This change was announced by S&P Dow Jones Indices on Friday after the stock market closed. The market's reaction was swift: Nvidia shares experienced a surge of 2.9 percent, while Intel's shares fell by 1.9 percent. Nvidia's official inclusion in the prestigious index will take place on Friday, November 8, before the market opens. Intel, which has been a staple of the Dow Jones since 1999 and was added during the heights of the dot-com era, will have to vacate its position. The change, according to S&P Dow Jones Indices, is intended to ensure a more representative depiction of the semiconductor industry. With a substantial market capitalization of $3.39 trillion, Nvidia ranks second among the largest stocks traded on US exchanges, surpassing Intel many times over. With its pioneering role in the field of AI technology, Nvidia, particularly in comparison to Intel, provides better insight into the current technological milieu of the USA. This restructuring reflects the technological dominance that increasingly characterizes the Dow Jones. The stock split executed by Nvidia in June at a ratio of 10:1 also paved the way for this change, as the price weighting of the Dow better correlates with Nvidia. Thus, the new index members contribute proportionally to the movements in the Dow Jones, which in turn serves as a reflection of the US stock market and economy.