What is Nasdaq?
Nasdaq is the second-largest US stock exchange and the preferred listing venue for technology companies, operating a fully electronic market and home to major indices including the Nasdaq Composite and Nasdaq-100.
Nasdaq (National Association of Securities Dealers Automated Quotations) was the world's first fully electronic stock exchange, launched in 1971. Its fully screen-based trading model made it the natural home for technology companies, and it remains the listing venue of choice for US and global tech giants including Apple, Microsoft, Nvidia, Amazon, Alphabet, and Meta.
Unlike the NYSE, which uses Designated Market Makers and a hybrid floor model, Nasdaq uses a competing market maker system for its less-liquid stocks and electronic communication networks (ECNs) for its larger names. In practice, the majority of Nasdaq trading is now handled electronically through its own exchange platforms.
Nasdaq operates several indices. The Nasdaq Composite measures all stocks listed on the Nasdaq exchange — more than 3,000 companies — and is heavily weighted toward technology. The Nasdaq-100 tracks the 100 largest non-financial companies listed on Nasdaq and is the benchmark for the widely traded QQQ ETF. Because the Nasdaq-100 excludes financials, it gives a purer read on technology, consumer discretionary, healthcare, and communications sectors.
Listing requirements on Nasdaq are tiered. The Global Select Market is the most stringent tier, followed by the Global Market and the Capital Market (which accommodates smaller companies). Technology startups that IPO at smaller sizes often begin on the Nasdaq Capital Market and work toward Global Select Market standards as they grow.
Nasdaq also operates a significant derivatives and options exchange, and its technology infrastructure powers dozens of exchanges worldwide. The exchange's name is often used as shorthand for the technology sector itself, so when commentators say "Nasdaq fell today," they typically mean technology stocks broadly declined.