Feb. 6, 20206 min read

How America’s Stock Exchange Has Changed in 117 Years

Written by stockstotrade

The industries attracting many investors into companies listed on the stock market have radically changed over the past 100 years or so, as the world’s industrial and technological innovations and revolutions have shifted the investor attention and market valuations to new sectors at the expense of declining industries.

The industry composition of the U.S. stock market in 1900 and in 2017 offers a glimpse into how innovation and trends have led to the boom and bust of many business sectors. It also shows that what was worth investing in 100 years ago may not be worth a dime now and that what we see as new technologies today will likely be obsolete at the turn of the 22nd century.

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In its yearly publication, Credit Suisse Global Investment Returns Yearbook 2017, the Swiss-based global financial services group tells the story of ‘The Great Transformation’ – how industries were weighted in the U.S. stock markets at the turn of the 20th century, in 1900 and now in 2017.   

The U.S. stock market, back in 1900, was dominated by one industry: railroads. The listed railway companies made up 63 percent of the stock market value in the U.S. A good 117 years later, railroads account for less than 1 percent of the U.S. stock exchange value and almost zero on the London stock market, Credit Suisse says.

How America’s Stock Exchange Has Changed in 117 YearsThis isn’t surprising, given the fact that in 1900 it wouldn’t be another three years until the Ford Motor Company was incorporated and another eight years until Henry Ford would launch the Model T, the car that heralded the era of the U.S. mass automobile market.  


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“Mankind has enjoyed a wave of transformative innovation dating from the Industrial Revolution, continuing through the Golden Age of Invention in the late 19th century, and extending into today’s information revolution,” Credit Suisse said in its yearbook.

Invention and innovation have changed the industry landscape so much that from today’s perspective it’s difficult to grasp that the listed companies in 1900 included the world’s biggest candle maker and the global leader in match manufacturing at the time.  

Innovation has also brought about industries that did not exist 100 years ago: electricity generation, car manufacturing, aircraft and airlines, oil and gas, telecommunications, pharmaceuticals—without even getting into computers, smartphones or social media. And surely, in 2100, people will see smartphones as a thing of the past.


According to Credit Suisse’s data, more than 80 percent of the value of the listed companies in 1900 was in sectors that are now very small or even extinct. The railroad industry is not the only one that has lost relevance as weighting on stock market values — textiles, iron, coal and steel have also declined and production has moved to emerging economies.


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On the other hand, today’s largest industry values on the stock market were either small or non-existent back in 1900, with 62 percent of the U.S. market value today consisting of such industries. Today, the biggest industries are technology, oil and gas, banking, and healthcare – and of these, technology, oil and gas and healthcare were almost zero at the beginning of the 20th century.  

One sector, however, has been present throughout all of the changes in industry: banking. The weighting of the banks today is equal to their relative share in 1900. Whether it’s for giving loans to industries, personal home mortgage or retail and investment banking, the industry continues to play an important role in the U.S. society and hence, stock market today.

In the same way, food, beverages (including alcohol) and utilities continue to be present on the stock markets, just as they were in 1900.

Since the turn of the 20th century, the U.S. stock market has changed not only its industry weighting. It has turned into the biggest equity market in the world.

Credit Suisse’s chart shows that as of  year end-1899, the UK equity market was the world’s biggest, accounting for 25 percent of global market capitalization. The U.S. was second, making up 15 percent of the companies’ capitalization. Early in the 20th century, the U.S. equity market overtook the UK. Although Japan was briefly the leader toward the end of the 1980s and early 1990s, it has performed very poorly since, allowing the U.S. to reclaim the top spot and still have it.

Commenting on the U.S. stock market dominance throughout most of the past 100 years, Credit Suisse said:

“This reflects the superior performance of the US economy, the large volume of IPOs and the substantial returns from US stocks.”  

According to the Swiss bank, equities and government bonds in the U.S. have yielded annualized real returns of 6.4 percent and 2.0 percent, respectively, since 1900.

The fundamental changes that the global markets have gone through in about 100 years point to how innovation, technology, society and politics are influencing the various industries and their market standing and capitalization.

So, will robotics, spacecraft and artificial intelligence be the dominant industries 50 or 100 years from now?