What it is
The S&P 500, or Standard & Poor's 500, is a stock market index that tracks the performance of 500 of the largest U.S. companies. It is a market-capitalization-weighted index, meaning companies with larger market values have a greater impact on the index's performance. The S&P 500 is broadly recognized as one of the best gauges of large-cap U.S. equities and the overall health of the U.S. stock market.
Many mutual funds and exchange-traded funds (ETFs) aim to replicate the S&P 500's performance, making it a cornerstone for passive investing. Its composition is reviewed periodically, with companies added or removed based on criteria such as market capitalization, liquidity, and sector representation. Investors follow the S&P 500 to understand broad market trends and economic sentiment.
Why it matters
The S&P 500 is a key benchmark for the U.S. stock market, providing a snapshot of the economy's health and the performance of large companies.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice