S&P 500
S&P 500: A Broad Market Indicator
The S&P 500 is a stock market index that tracks the performance of 500 of the largest U.S. publicly traded companies.
It is often considered a reliable barometer of the overall U.S. stock market.
1. S&P 500® | S&P Dow Jones Indices - S&P Global
2. S&P 500 Index: What It's for and Why It's Important in Investing - Investopedia
Key Differences from Nasdaq and Dow
While all three indices represent a segment of the U.S. stock market, they differ in several key ways:
Number of companies:
Dow Jones: 30 large, blue-chip companies
1. All 30 Dow Jones Stocks Ranked: The Pros Weigh In | Kiplinger
Nasdaq Composite: Over 3,000 companies, heavily weighted towards technology
1. What is the Nasdaq Composite, and What Companies are in It?
S&P 500: 500 large-cap companies across various sectors
Weighting:
Dow Jones: Price-weighted (higher-priced stocks have a larger impact)
Nasdaq Composite and S&P 500: Market-capitalization-weighted (larger companies have a larger impact)
1. What Does the Nasdaq Composite Index Measure? - Investopedia
Sector representation:
Dow Jones: Broad range of sectors
Nasdaq Composite: Heavily weighted towards technology
S&P 500: Broad representation of sectors, but not as technology-focused as Nasdaq
In summary, the S&P 500 offers a broader and more diversified representation of the U.S. stock market compared to the Dow Jones. While the Nasdaq Composite also includes a large number of companies, it has a stronger focus on technology.