Market overview

The S&P 500 (Standard & Poor’s 500) is one of the most widely followed stock market indices in the world. Here’s a clear overview:

What It Is

• The S&P 500 tracks the 500 largest publicly traded companies in the United States.

• It’s a market-capitalization-weighted index, meaning companies with larger market values have more influence on its movement (e.g., Apple and Microsoft move the index more than smaller firms).

Who Maintains It

• Managed by S&P Dow Jones Indices, a division of S&P Global.

• Considered a key benchmark for the overall U.S. stock market and economy.

What Companies It Includes

• Covers companies across all major sectors:

  • Technology (Apple, Microsoft, NVIDIA) – Look more about AI company reviews and tools guides here = > AI tools and benefits 

  • Healthcare (UnitedHealth, Johnson & Johnson)

  • Financials (JPMorgan Chase, Goldman Sachs)

  • Consumer, Industrial, Energy, Utilities, and more.

• Represents roughly 80% of total U.S. market capitalization.

Why It Matters

• Used as a benchmark for investment performance (e.g., many mutual funds and ETFs track it).

• Seen as a barometer for the health of the U.S. economy.

• Basis for popular investment products like the SPDR S&P 500 ETF (SPY) and Vanguard 500 Index Fund (VOO).

How It’s Calculated

• Each company’s weight = Company’s Market Cap ÷ Total Market Cap of All 500 Companies

  Company’s Market Cap÷Total Market Cap of All 500 Companies

• Index value moves proportionally with changes in market caps of its constituents.

History

• Introduced in 1957.

• Long-term historical return (including dividends): roughly 10% per year on average (though it fluctuates year to year)