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A market-capitalization-weighted index of 500 of the largest publicly traded companies in the United States, widely regarded as the best gauge of U.S. large-cap equity performance.
Maintained by S&P Dow Jones Indices, the S&P 500 covers approximately 80% of the total U.S. stock market capitalization. Companies must meet specific criteria for inclusion, including adequate market cap, liquidity, and profitability. The index is cap-weighted, meaning larger companies like Apple and Microsoft have a greater influence on its performance than smaller constituents. The S&P 500 has returned an average of roughly 10% per year since its inception, including dividends. It serves as the benchmark for most U.S. equity funds and is the basis for the most widely held index funds and ETFs in the world.