Definition
S&P 500
The S&P 500 is a market-cap-weighted index of 500 leading US companies, the most widely followed benchmark of the American stock market.
The S&P 500 spans large US firms across sectors and is the global reference for equity performance and risk appetite. Many Indian international funds and ETFs track it, giving domestic investors dollar exposure to US giants.
Because US equities lead global sentiment, a strong or weak S&P session often sets the tone for Asian markets including the Nifty the next day. It is weighted by free-float market cap, so mega-caps like Apple and Microsoft heavily influence its moves.
Related terms
- International FundAn international or global fund invests in stocks listed outside India, giving Indian investors exposure to foreign markets like the US, Europe or China.
- Dow Jones Industrial AverageThe Dow Jones Industrial Average is a price-weighted index of 30 large US blue-chip companies, the oldest and most quoted US stock-market gauge.
- Nasdaq CompositeThe Nasdaq Composite is a market-cap-weighted index of more than 3,000 stocks listed on the Nasdaq exchange in the US, heavily tilted toward technology companies.
- MSCI World IndexThe MSCI World Index tracks large and mid-cap stocks across developed markets only, excluding emerging economies such as India, which sit in the separate MSCI Emerging Markets Index.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.