The S&P 500 Index, or the Standard & Poor’s 500 Index, is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. It is not an exact list of the top 500 U.S. companies by market capitalization because there are other criteria to be included in the index. The index is widely regarded as the best gauge of large-cap U.S. equities. Other common U.S. stock market benchmarks include the Dow Jones Industrial Average, or Dow 30, and the Russell 2000 Index, which represents the small-cap index.
Historical Chart(Log Scale)
Interactive chart of the S&P 500 stock market index since 1927. Historical data is inflation-adjusted using the headline CPI and each data point represents the month-end closing value.
The S&P 500 index is a capitalization-weighted index and the 10 largest companies in the index account for 27.5% of the market capitalization of the index. The 10 largest companies in the index, in order of weighting, are Apple Inc., Microsoft, Amazon.com, Facebook, Alphabet Inc. (class A & C), Tesla, Inc., Berkshire Hathaway, JPMorgan Chase & Co., and Johnson & Johnson, respectively.
Index funds that track the S&P 500 have been recommended as investments by Warren Buffett, Burton Malkiel, and John C. Bogle for investors with long time horizons.
To remain indicative of the largest public companies in the United States, the index is reconstituted quarterly.
S&P 500 vs. DJIA
The S&P 500 is often the institutional investor’s preferred index given its depth and breadth, while the Dow Jones Industrial Average has historically been associated with the retail investor’s gauge of the U.S. stock market. Institutional investors perceive the S&P 500 as more representative of U.S. equity markets because it comprises more stocks across all sectors (500 versus the Dow’s 30 industrials).