The Dow Jones Industrial Average(DJINDICES: ^DJI) is having a strong year. The venerable market index of 30 bellwether stocks is up more than 15% on the year. It's on track for a better performance than last year, when it delivered a nearly 14% return.
Several stocks contributed to the strong run of the Dow Jones this year. Here's a closer look at the top five performers:
Dow Jones Stock | Year-to-Date Return |
|---|---|
Walmart(NYSE: WMT) | 60.3% |
Goldman Sachs(NYSE: GS) | 53.9% |
American Express(NYSE: AXP) | 53.1% |
JPMorgan(NYSE: JPM) | 44.2% |
Travelers(NYSE: TRV) | 36.9% |
Data source: Slickcharts.com. Return data as of Nov. 18, 2024.
Technically, Nvidia is the top-performing stock in the Dow this year, at a nearly 190% return, driven by artificial intelligence (AI) exuberance. However, the semiconductor giant has only been a member of the index since Nov. 8, when it joined Sherwin-Williams in replacing Intel and Dow. That duo had ranked among the worst-performing Dow stocks this year before the index showed them the door.
Ex-Nvidia, Walmart has led the Dow's charge this year. The retail giant is having its best year since 1999. It has benefited as cost-conscious consumers, feeling the sting of inflation, increasingly shop more at the lower-priced retailer. Walmart's investments in e-commerce and advertising are also starting to pay dividends, enabling it to grow its earnings faster than revenue.
The remaining top Dow performers are all financial stocks. That sector has gotten a bit of a boost from the Federal Reserve, which has started lowering the federal funds rate. Lower rates have made it cheaper for financial companies to borrow money. Falling rates have also raised the value of certain investments, such as bonds and commercial real estate, boosting the value of their investment portfolios.
The tailwinds benefiting Walmart and financial stocks should remain strong in the coming quarters, as long as the Federal Reserve successfully tames inflation without sending the economy into a recession. Because of that, these top-performing Dow stocks could continue to rise in the near term.
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American Express is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Matt DiLallo has positions in Intel and JPMorgan Chase and has the following options: long January 2025 $30 calls on Intel and short January 2025 $30 puts on Intel. The Motley Fool has positions in and recommends Goldman Sachs Group, Intel, JPMorgan Chase, Nvidia, and Walmart. The Motley Fool recommends Sherwin-Williams and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
