Dow Jones Struggles as Old Economy Earnings Lag Tech Led Benchmarks

The Dow Jones Industrial Average has spent much of 2025 lagging behind more tech heavy indices, highlighting a growing divide between legacy industrial sectors and the high growth companies driving much of the market’s excitement.

Periods of sharp volatility around major earnings releases have repeatedly underscored the point, when megacap tech stocks stumble, the Nasdaq and S&P 500 take the headline hit, but when industrial and cyclical names disappoint, the Dow feels the impact more acutely because of its composition and price weighting. On several recent sessions, the Dow has reversed large intraday gains to close lower as weakness in industrial components overwhelmed strength elsewhere.

Behind the index-level moves is a more fundamental story. Higher borrowing costs, geopolitical uncertainty and softer global trade flows have squeezed many industrial companies at the same time as they grapple with the need to reinvest in supply chains, automation and energy transition initiatives.

Earnings reports across components in manufacturing, transport and capital goods have shown slower growth and, in some cases, margin compression as firms struggle to fully pass rising costs on to customers.

That contrasts with parts of the tech and communication-services universe, where asset-light models and software or AI driven revenue streams have proven more resilient.

Investors are responding by tilting portfolios toward sectors with better earnings visibility and away from those most exposed to late cycle economic risk.

As a result, the Dow has increasingly become a barometer for how much faith the market still has in old economy cyclicals. When optimism about global growth fades or trade tensions resurface, the index tends to underperform; when sentiment improves and hopes for a reacceleration in industrial demand rise, it can briefly outperform but those windows have been shorter and less convincing in 2025.

For now, the gap between the Dow and more growth-oriented benchmarks is a reminder that “the market” is not a single, uniform entity.

Under the surface, different sectors are living in different cycles.

Unless industrial earnings begin to show a sustained improvement, the Dow is likely to remain the laggard in a market still largely driven by technology and services and investors who equate it with the overall health of U.S. equities may be getting an incomplete picture.