What is the S&P 500?

The S&P 500 (Standard & Poor's 500) is the benchmark index for the US stock market and arguably the most closely watched equity index in the world. Maintained by S&P Dow Jones Indices, it tracks 500 large-cap companies listed on the New York Stock Exchange (NYSE) or Nasdaq, spanning all major sectors of the economy.

Launched in its current form in 1957, the index is market-cap weighted and adjusted for free float, meaning the largest companies by investable market capitalisation have the most influence. As of mid-2025, the top ten constituents — dominated by technology and consumer-discretionary mega-caps — together account for more than 30% of the index's total weight, so major moves in Apple, Microsoft, Nvidia, or Amazon frequently drive the index's day-to-day direction.

Membership is not automatic for large companies. The S&P Index Committee selects constituents based on criteria that include market capitalisation (minimum US$18 billion), liquidity, domicile in the US, a public float of at least 50%, positive as-reported earnings over the most recent quarter and the four most recent quarters combined, and at least one year of trading history. This rules out many fast-growing but unprofitable firms.

The S&P 500 is the basis for trillions of dollars in index funds, ETFs, and derivatives. The SPDR S&P 500 ETF (SPY) is among the world's most liquid securities. When analysts talk about "the market" in the US context, they typically mean the S&P 500, not the older but price-weighted Dow Jones Industrial Average.

Dividend income is not included in the headline index level; the S&P 500 Total Return Index reinvests dividends and gives a fuller picture of investor returns over time.