The S&P 500 is the U.S. stock-market index that tracks 500 leading companies and serves as a widely used large-cap benchmark.
Standard & Poor’s introduced the modern S&P 500 in 1957. It is weighted by float-adjusted market capitalization, so companies with more publicly tradable shares and larger market values have greater influence on the index’s movements. The index includes companies from many industries, although it is not a complete list of every major U.S. business.
A common mix-up is assuming that the S&P 500 contains exactly 500 stocks. It generally represents 500 companies, but some companies have more than one share class included, so the number of constituent securities can differ. The index also differs from the Dow Jones Industrial Average, which contains only 30 companies and uses a price-weighting method.
Investors cannot buy the index directly, but index funds and exchange-traded funds attempt to track it. Its performance is often used as a reference point when judging the results of U.S. large-company portfolios.