What is the S&P 500?
The S&P 500 is a stock market index that tracks 500 of the largest publicly traded companies in the United States. Some well-known companies in the S&P 500 include Apple, Nvidia, Microsoft, Amazon, Walmart, JPMorgan Chase, and ExxonMobil.
- 500
- Large-cap U.S. companies
- rebalanced quarterly
- ~$44T
- Combined market cap
- roughly 80% of U.S. equities
- 1957
- Index launched
- modern form, S&P Dow Jones Indices
01Read it
America's corporate leaderboard
The S&P 500 is not just a random collection of companies.
Think of it as a corporate leaderboard. Companies must earn a place in the index and continue meeting certain standards to remain there. If they no longer qualify, they can be removed and replaced by other companies.
And despite what many people think, the S&P 500 isn't just tech companies. It includes businesses from healthcare, banking, retail, energy, manufacturing, and many other industries.
Entry requirements
- U.S. listedTrades on NYSE or Nasdaq
- Market cap $22.7B+As of early 2026
- 4 profitable quartersPositive GAAP earnings
- High liquidityActive trading volume
~3 companies replaced per quarter on average
Why does the S&P 500 matter?
There are thousands of publicly traded companies in the United States. Tracking all of them would be difficult. Instead, investors use the S&P 500 as a quick way to see how the market is performing.
When the S&P 500 rises, it generally means many of America's largest companies are doing well. When it falls, it often means those companies are struggling.
For this reason, the S&P 500 is one of the most closely watched financial indexes in the world.
Why bigger companies matter more?
Not every company in the S&P 500 has the same influence.
The index uses a system called market-cap weighting. In simple terms, companies with larger market values receive a larger weight in the index.
For example, a giant company like Apple affects the index much more than a smaller company near the bottom of the list.
For example, Apple makes up a larger portion of the S&P 500 than most other companies. If you invest $100 in an S&P 500 index fund, more of your money will be invested in Apple than in smaller companies near the bottom of the index.
Can you invest in the S&P 500?
Not directly.
The S&P 500 is just a list, so there's nothing to buy.
Instead, you can invest in index funds or exchange-traded funds (ETFs) that track the S&P 500. These funds buy shares in the companies that make up the index and bundle them into a single investment.
That means one investment can give you exposure to hundreds of America's largest companies at once.
02See it
29 green years. 7 red ones.
The red bars look scary — but they're rarer, and every one of them was followed by a recovery.
The stock market can feel unpredictable in the short term, but in the long run we can see that it has always gone up over many years.
Looking at the S&P 500 since 1990, 29 of the last 36 years ended with positive returns, while only 7 ended with losses. That's roughly 4 positive years for every 1 negative year.
However, even if you had invested just before the crash and held your investment, you would have recovered your losses in about six years. By around ten years, your investment would have roughly doubled, and by twelve years it would have nearly tripled.
The market has experienced crashes, recessions, and periods of uncertainty, but over time it has continued to recover and grow.
Total return, dividends reinvested. Illustrative. Not investment advice.
Who's actually inside
Just 10 companies control 37.0% of the entire index — technology alone accounts for nearly a third. When the big tech names move sharply, the whole index moves with them.
- #1
NVDANVIDIA7.37% - #2
AAPLApple6.34% - #3
MSFTMicrosoft4.30% - #4
AMZNAmazon3.80% - #5
GOOGLAlphabet A3.36% - #6GOOGAlphabet C3.13%
- #7
AVGOBroadcom2.69% - #8
TSLATesla2.26% - #9
METAMeta2.13% - #10
MUMicron1.64%
Approximate weights, June 2026. For illustrative purposes only. Not investment advice.
03Try it
The time machine
Pick a year, drop in some money, and see what the real S&P 500 returns would have done to it. Try starting in 2000 or 2008 — right before the crashes.
What if you'd invested?
Worth end of 2025
$7,528
Total return
+653%
Years invested
26
Compounds real annual total returns, 1990–2025. Before fees and inflation. Illustrative only — not investment advice.
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