Stock indexes track markets through groupings of companies

The S&P 500, managed by the same company, is another major stock index

Also run by S&P Dow Jones Indices, the S&P 500 tracks 500 large US firms using market-value weighting. Many analysts view it as a more accurate gauge of the American economy.

Investors rely on the S&P 500 as a benchmark for the state of the economy

Since the index represents a broad range of diverse industries, it's become a proxy for the market itself and a common benchmark for investors to compare returns and performance patterns against. Generally speaking, when someone says a stock is under- or out-performing the market, that actually means under- or out-performing the S&P 500. The S&P 500 is exchange-agnostic, and includes companies listed on both the NYSE and Nasdaq.

The Dow Jones Industrial Average is a stock market index

The Dow Jones Industrial Average tracks 30 large U.S. companies from all major U.S. sectors except for utilities and transportation. It's considered a bellwether of the U.S. economy.

The Nasdaq Composite index includes all of the companies traded on the exchange

This 3,000+ company index stands in contrast to the Nasdaq 100, which only includes 100 of the most influential non-financial companies traded on the exchange. These are the two most commonly used indices for Nasdaq investments.

The Dow Jones Industrial Average vs. the S&P 500: Which one is a better representation of the economy?

The Dow and S&P 500 are both indexes meant to provide a broad representation of the economy. The Dow has 30 companies and is weighted by share price, while the S&P 500 has 500 different companies weighted by market capitalization. Since the indexes are so different, investors don't always agree on which index is a better representation of the economy—though the two move in the same direction more than 90% of the time.

The Dow now tracks 30 major US companies across various industries

Since 1928, the DJIA has included 30 firms. Today's group spans technology, healthcare, and finance—with Apple, Microsoft, JPMorgan Chase, Pfizer, and Coca-Cola among its most recognized components.

Visualizing decades of stock market performance

Stock markets and the indexes that track their biggest companies tend to ebb and flow, with long growth periods punctuated by shorter recessions. Track the 60-year history of one of the most common stock market indexes, the S&P 500, with this data visualization. The chart highlights the long-term durability of markets despite appearance of short-term volatility.

Dow components are chosen by a committee, not a formula

Unlike many indices, the Dow has no strict rules for inclusion. A small committee at S&P Dow Jones Indices uses judgment—favoring companies with strong reputations, steady growth, and broad investor interest.

The Dow remains a shorthand for America’s economic health

For over a century, the Dow Jones Industrial Average has been one of the most closely watched market barometers. Its rises and falls dominate headlines and politics, shaping how Americans perceive the strength of their economy.

Some argue that the S&P 500 is actually an actively managed index

Some critics of the S&P 500's selection process argue that human involvement makes it an actively managed index. S&P Global maintains that while a human selects the stocks in the index, those decisions are not made with the intent of maximizing performance, but rather, to provide a snapshot of the largest companies across different industries.

The stock market, explained in 3 minutes

The stock market consists of a set of exchanges and other venues where shares of public companies are bought and sold. The Nasdaq and the New York Stock Exchange are two of the most well-known exchanges in the US, while major exchanges also operate around the world, including in Tokyo, Shanghai, London, and São Paulo.

The Dow’s price-weighted formula makes stock price matter more than size

Unlike most indices, which weigh companies by market value, the DJIA is price-weighted—meaning higher-priced stocks have more influence on its movements. As a result, a company’s share price matters more than its overall size.

Watch how the S&P 500 is actually calculated

After accounting for each company's float-adjusted market capitalization (a metric that combines the price of a company's stock, the total number of shares, and the stock's float, which means how many shares are actually available), the S&P 500 formula uses a divisor to create the index number. However, what the divisor is and what it represents are secrets.

The S&P 500 is composed of 500 companies, but has more than 500 total listings

Since some large companies have dual-class stock structures (like Alphabet and Fox Corporation), there are multiple listings on the S&P 500 for the same company. S&P Global has banned and then reversed bans on companies with dual-class structures multiple times since first allowing dual-class stocks in 2014.

See every company in and out of the Dow since 1928

The index has had 30 companies since 1928. See each company’s tenure on the index and what firms were added or replaced by year and industry.

The Nasdaq's 'Magnificent 7' have an outsized impact on the Nasdaq 100's performance

These seven companies are Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. They're often responsible for over 40% of the Nasdaq 100 index's gains, but the exact percentage varies from year to year.

Visualize the differences between the NYSE and the Nasdaq

The two largest stock exchanges in the world by market cap of their listed companies have many key differences, including the number of companies listed on each exchange (the NYSE has fewer companies than the Nasdaq), their perceived volatility (the Nasdaq is perceived as more volatile), and more.

The S&P 500 selection committee has strict rules around adding a company to the index

While the decision to add a company to the index is ultimately up to the selection committee, any prospective company has to meet some criteria to be considered. To join, the company must have been profitable for the last four quarters, must have a market capitalization exceeding $22.7B, and meet certain requirements around tradeable stock availability (or float).

Why does the stock market matter?

Open any newspaper, turn on your local TV news station, or listen to a daily business radio segment, and you’re bound to hear about how the stock market is performing. Netflix created a 17-minute (free) explainer that dives deep into the nitty-gritty of how we got here.

The S&P 500 yields a roughly 10.5% average annual return

Tthe factors that go into that calculation are multifaceted—from how inflation impacts it to the stocks themselves. During periods of high inflation, stock performance can be stunted by investor concerns, for instance. The average return also varies based on whether dividends are included.

Explore a step-by-step guide for getting started as a retail investor

Instead of purchasing individual stocks and bonds, new investors may want to start in funds that track an index—like the S&P 500—or that hold a group of themed stocks.

In late 2025, the top 10 companies in the S&P 500 made up more than 40% of the index's total value

This raised concerns for investors about the index's risk exposure. As many large tech companies continued posting record highs, analysts argued that the top-heavy index was becoming less representative of the economy as a whole.

Shares are parts of a stock that represent ownership of a company

Shares are traded on the stock market. Once you buy a single share of a company, you are considered a shareholder of that company and may have certain rights as a partial owner, such as voting on business decisions.

A stock market timeline

The stock market has come a long way since the 1600s, when the first version of a stock exchange was created in Amsterdam. Mile markers along the way include everything from the Dow Jones Industrial Average's creation in 1896 to the stock market woes during the COVID-19 pandemic in 2020.

The stock market has crashed many times throughout history

Have you ever wondered how long it takes the market to recover after a crash? This chart outlines major stock market dips throughout history and tracks how many days it took for the market to recover.

The Vanguard Total Stock Market Index, was worth roughly $1.47T as of February 2024

That fund (and the other seven largest mutual funds by assets) is an index fund, meaning it invests in a specific set of preset securities.

Mapping the world's 25 largest stock exchanges

Totaling a market capitalization of $106T (as of 2023), this map identifies the major stock exchanges worldwide on a map, ranking them by total market value. Nearly half of that value is located in the Americas.

The stock market, explained in 3 minutes

Curious about the inner workings of the stock market? 1440's got your breakdown of how it works.

40 key stock market terms, explained

Liquidity. Forex. Capitalization. Blue chip stocks. These are just a few pieces of stock market vocabulary most people who don't spend all day on a trading floor might not know. Thankfully, we found a fun infographic that makes it easier to learn what 40 key stock market terms mean and why each of them matters.

Read about the 'gatekeeper' of the stock market, former index chair at S&P Global

David Blitzer, the former index chair at S&P Global, earned the nickname "gatekeeper" of the stock market after helping decide which companies made it into the S&P 500 for 24 years. Blitzer became a legend in the world of indexing and has a reputation for being even-tempered and always wearing a bow tie.

See a real-time list of the most shorted stocks in the US

Every two weeks, the Nasdaq and New York Stock Exchange release the stocks with the most short positions. Some of the companies with the highest short positions as of early 2026 were Hims & Hers and Groupon.

The number of publicly traded companies has decreased in recent years.

In 1996, more than 7,300 companies traded publicly on US stock markets, but that number has recently dropped to 4,300. Economists point to two reasons: First, going public requires full disclosure of operations, exposing it to scrutiny from investors, competitors, and analysts. Second, the IPO process is expensive and time-consuming.

The Nasdaq was founded in 1971, marking the debut of electronic trading

The Nasdaq stock exchange arguably invented electronic trading, making it a key part of fintech history. It's often used as a benchmark for how the tech industry is performing.

Test your ETF knowledge

A 10-question quiz from the SEC allows investors to test their basic knowledge about exchange-traded funds and their investing counterparts, mutual funds. Here’s a sample question: Is the past performance of a fund a good indicator of future results? (Hint, the answer is no).

The difference between stocks and bonds

While more people invest in stocks than bonds, experts say owning both can make for a healthier portfolio. Stocks are considered a riskier investment than bonds, but tend to have higher returns. While bonds might be the safer option, they won’t grow your wealth as quickly.

A direct listing is when a company goes public, listing shares on a stock exchange

A direct listing is when a company goes public, listing its shares on a stock exchange, rather than issuing new shares or raising capital. That means investment banks—traditionally serving as intermediaries—could lose out on some of the profits from these deals as more companies like Spotify opt for direct listings.

Check the current Consumer Price Index

The Consumer Price Index is a metric that attempts to capture price changes felt by consumers by averaging a basket of about 80,000 items, each weighted to reflect the impact of changes on households.

Active investors try to 'beat' the stock market's performance

There are two primary types of investment strategies that professional investors use: active investing and passive investing. While active investors try to "beat" the stock market's performance, passive investors have a bit more faith in the system.

There are ETFs that track lawmakers' stock purchases

If you can’t get enough politics in your life, why not invest like a politician? Because members of Congress are required to disclose their stock purchases, you can do just that, and the NANC and KRUZ ETFs make it even easier. NANC, referencing Nancy Pelosi, holds a basket of stocks that Democratic politicians have purchased. KRUZ, referencing Ted Cruz, holds a basket of Republican-held stocks.

Biotech ETFs allow investors to gain exposure to multiple promising companies in the industry

Biotech ETFs offer a diversified alternative to purchasing an individual biotech stock and gambling on whether an individual company’s clinical trial yields the next blockbuster cancer treatment or an absolute flop. This list of the top biotech ETFs in 2025 can help you learn more about them.

Chapter 7 and Chapter 11 filings can impact common stockholders

Publicly traded companies don’t file for bankruptcy out of nowhere—there are typically warning signs in a stock’s performance, quarterly earnings calls, and US Securities and Exchange Commission filings.

How the S&P 500 performed in the first 100 days of each modern US presidential term

The S&P 500 was up 5.3% during President Donald Trump's first 100 days in office during his first term as president, and down 7.1% during the first 100 days of his second term.

How the stock market performed under every US president

It's worth noting that the stock market as we know it today didn't exist under the leadership of earlier presidents, such as George Washington and Thomas Jefferson.

Securities is a term used to describe different types of investments

Not every type of investment qualifies as a security (like property or gold). Securities fall under four main categories (equity, debt, derivative, and hybrid) that serve different functions in the market.

Some private credit funds trade on the stock market

These funds, which trade at market prices, are called "public BDCs," which stands for "business development companies." For instance, the global alternative investment manager Ares Management Corp. has a public BDC.

How mutual funds work

Investing in mutual funds can give you access to a wide range of securities, such as stocks and bonds, with just a single investment. Mutual funds are one of today's most common investment options. There are different types of mutual funds, such as stock, bond, money market, and target-date funds.

Ride along on one coffee company’s journey through the stock market

From going public with an initial public offering, to struggling with how negative news coverage impacts a stock’s value, this video lets you put yourself in the shoes of a newly public company. This makes learning about the inner workings of the stock market much easier.

S&P 500 stocks that have increased their dividends for 25 consecutive years are called 'dividend aristocrats'

Dividend aristocrats are considered the best of the best on the S&P 500—all with market capitalizations above $3B, more than $5M in daily trading volume, and consecutive dividend growth for a minimum of 25 years. Some examples of dividend aristocrats are Coca-Cola, Procter & Gamble, and Walmart.

The 'commodities' investment category includes livestock, oil, wheat, and more

Commodities traders look at all of these things as assets, placing short-, medium-, and long-term wagers on how much each is really worth. Commodities are valuable in part due to how essential they are in creating most of the world's marketable goods.

Investors collectively own $28T in US Treasury securities

The 10-year Treasury yield is a central measure of the health of the economy, shaping how much both the government pays on its debt and the cost of borrowing for the private sector. This explainer provides stats and explainers on the important metric.