Glossary
S&P 500
S&P Dow Jones Indices’ float-weighted index of 500 leading US companies, the most widely used benchmark for US large-cap stocks.
On this page
The S&P 500 is an index of 500 of the largest publicly traded US companies, maintained by S&P Dow Jones Indices. It covers roughly 80% of the total value of the US stock market, which makes it the standard yardstick for "the market" in news reports, fund performance and academic research. When people say stocks were up 1% today, they usually mean the S&P 500.
How it works
A committee chooses the members using published rules. To be added, a company must be US-based and listed on a US exchange, with enough float and trading volume. As of July 2025 it also needed a market cap of at least $22.7 billion, a threshold the committee reviews periodically, and positive earnings in its most recent quarter and over the last four combined. Because some companies have more than one share class, the index usually holds slightly more than 500 stocks.
Each member is weighted by its float-adjusted market capitalization: its share price times the shares available to the public. The largest companies therefore move the index the most.
What to keep in mind
- Concentration. In recent years the ten largest members have made up more than a third of the index, so a few technology-related giants drive much of its return.
- Price versus total return. The quoted index level excludes dividends. The total-return version, which reinvests them, has outperformed the price index by roughly the dividend yield each year.
- Large caps only. It leaves out mid- and small-cap stocks, which the S&P MidCap 400 and SmallCap 600, or the Russell 2000, cover.
Index funds and ETFs tracking the S&P 500 are among the cheapest and most widely held investments in the world.