Former Starbucks CEO Howard Schultz summed it up succinctly:

“Managing and navigating through a financial crisis is no fun at all.”

It’s hard to argue with that one.

For investors, the very mention of Black Monday, the dot-com bust, or the 2008 financial crisis is often enough to revive hellish memories of steep losses and extreme market volatility.

In the U.S., the three most widely followed stock benchmarks are the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite. 

While they often move in the same direction during major market shocks, differences in how each index is structured can lead to notably different results during market crashes and financial crises.

Of the three, the Dow is arguably the most unique, and thus theoretically the most prone to being an outlier during times of market uncertainty. But is that what history shows?

Here, we examine the Dow’s performance during some of the most notorious market crashes and how it compared to the S&P 500 and the Nasdaq.

But first, it’s important to understand how each index differs.

The Dow Jones Industrial Average is the oldest U.S. stock index, dating back to 1896.

Photo by NurPhoto on Getty Images

How the Dow differs from the S&P 500 and the Nasdaq

The Dow is the oldest of the three indexes by far, and it remains one of the most closely watched gauges of the U.S. stock market and economy today. 

The index tracks 30 large, established companies and was created in 1896, when Grover Cleveland was in the White House and the Tabulating Machine Company—later known as IBM (SBUX)—was just getting its start.

With only 30 component stocks, the DJIA is very narrow in scope compared to its peers. It’s also price-weighted, meaning higher-priced stocks affect its value more than those that trade at lower share prices.

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In contrast, most other bellwether indexes, including the S&P 500 and the Nasdaq Composite, are capitalization-weighted, meaning companies with higher market values (regardless of share price) have more influence than smaller companies.

The S&P 500, which follows 500 of the largest publicly traded U.S. companies, launched in its modern form in 1957.

The Nasdaq Composite began operating in 1971 as the world’s first electronic stock market and today includes thousands of stocks (anything that trades on the Nasdaq exchange with a share price of over $1), with a heavy weighting toward technology and growth companies.

“Indexes like the S&P 500 and the Nasdaq Composite track a basket of stocks and consequently are more diversified than owning individual stocks, which can help mitigate the risks of any individual security,” wrote Seth Carlson of J.P. Morgan Wealth Management on the firm’s website.

“While such indexes mitigate volatility given their diversification, it’s important to note that some stocks within the index may experience outsized returns or losses.”

That dynamic was visible in 2023 and 2024, when a small group of large technology stocks — often referred to as the “Magnificent Seven” — accounted for a sizable share of the S&P 500’s gains.

DJIA vs. S&P 500 vs. Nasdaq Composite at a glance

How does the Dow perform when the market crashes?

Investors frequently wonder how the Dow performs during major downturns compared with the broader S&P 500 and the tech-heavy Nasdaq. One important difference is how the indexes are constructed.

The Dow is price-weighted, meaning stocks with higher share prices have greater influence on the index’s movement. By contrast, both the S&P 500 and the Nasdaq Composite are market-capitalization-weighted, giving the largest companies the biggest impact.

Data from Nasdaq Indexes, analyzing the Nasdaq‑100’s performance across three major crises, shows that tech-heavy stocks often experience larger swings than broader markets.

Related: What happens when a stock splits in the Dow Jones Industrial Average?

While the Nasdaq‑100’s volatility can exaggerate short-term losses, the broader Nasdaq Composite, which includes thousands of stocks, generally follows the same trends but with less extreme moves.

Since the Dow is made up of 30 mature, blue-chip companies — many of them established dividend payers — it often proves more resilient during sharp selloffs than indexes with heavier exposure to high-growth stocks. 

The Nasdaq Composite, by comparison, is typically the most volatile of the three because of its concentration in technology and growth-oriented companies. 

The S&P 500 generally tracks a path closer to the Dow, though its broader and more growth-oriented mix can lead to steeper declines during periods when investors aggressively rotate out of riskier sectors.

How the Dow performed during 3 major financial crises compared to other indexes

Here’s a more in-depth look at how the Dow — and its peers, the S&P 500 and the Nasdaq Composite —held up during three of the biggest market crashes in recent memory.

Black Monday (Oct. 19, 1987)

On the worst single trading day in modern U.S. market history, the Dow plunged 22.6%. The S&P 500 fell 20.47%, while the Nasdaq dropped about 11.4%. 

The episode highlighted how closely linked global financial markets had become, according to historical accounts from the Federal Reserve.

The dot-com bust (2000–2002)

When the technology bubble collapsed in the early 2000s, all three major indexes suffered prolonged declines. 

The Nasdaq, which had been driven sharply higher by unprofitable and highly speculative technology companies, fell far more dramatically than the broader market. 

The Dow also entered a multiyear bear market, but its losses were generally less severe than those seen in the Nasdaq.

 While the Dow recovered its prior peak several years later, the Nasdaq Composite did not fully regain its 2000 high until around 2015.

Related: What Was the Dot-Com Bubble & Why Did It Burst?

The global financial crisis (2007–2009)

During the 2008 collapse, the three benchmarks again moved sharply lower together, but the magnitude of the declines differed.

 For the full year of 2008, the S&P 500 fell roughly 38.5%, the Nasdaq declined about 40.5%, and the Dow lost close to 34%. 

The Dow’s recovery was supported by extraordinary government and central bank intervention, including large-scale financial system rescues. All three indexes bottomed in March 2009.

The Dow and the S&P 500 regained their pre-crisis highs by early 2013. 

The Nasdaq Composite, which had already been weighed down by much steeper losses during the earlier dot-com collapse, ultimately went on to outperform in the years following the financial crisis as technology stocks became market leaders again. 

Data published by Nasdaq Indexes show that the post-crisis recovery was marked by strong sector rotation, with technology-heavy benchmarks significantly outpacing indexes with larger weightings in financial and industrial companies.

The bottom line

During financial crises, all three major U.S. stock indexes tend to suffer large and synchronized declines. Historically, however, the Dow has often held up better on a relative basis than the Nasdaq — and sometimes better than the S&P 500 — because of its smaller, more conservative, blue-chip composition.

The trade-off is that in long recoveries driven by technology and growth stocks, the Nasdaq has frequently outperformed, while the Dow’s steadier mix of companies can lead to slower — but often less volatile — returns.

For investors, the differences highlight why broad diversification across multiple types of index funds can matter most when markets are under severe stress.

Related: DJIA Master List: What companies make up the Dow Jones Industrial Index in 2026?