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What is the S&P 500?

What is the S&P 500?

The S&P 500 (also known as the Standard & Poor's 500) is an index of the 500 largest and most important U.S. companies (selected by a special committee).

The S&P 500 is a cap-weighted index, meaning the respective weights of companies in the index depends on market capitalization. For example, since Apple Inc. and Google are the biggest companies in the U.S., they affect movements in the S&P 500 more than a smaller company, like Visa.

The S&P 500 is a better index for tracking U.S. domestic stocks than the Dow Jones Industrial Average, which is a price-weighted index.

What are SPDRs?
What is the NASDAQ?

Keywords: market indices, market capitalization, S&P 500, cap-weighted index, domestic stocks,