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S&P500
(Standard & Poor's 500)
The S&P500 is a market-cap-weighted index of 500 large U.S. companies (e.g., Apple, Exxon), representing ~80% of domestic equity market cap. It's the benchmark for passive investing via ETFs like SPY or IVV.
Curated by S&P Global, inclusion requires $14.5B+ market cap, profitability, and liquidity. Unlike the price-weighted DJIA, the S&P500 reflects broader market health. Its average annual return is ~10% since 1926. The FED watches the S&P500 for economic signals—drops often precede recessions. Investors use its P/E (historically 15–25x) to gauge valuations. ESG versions (e.g., S&P 500 ESG Index) exclude tobacco/fossil fuel firms.
Curated by S&P Global, inclusion requires $14.5B+ market cap, profitability, and liquidity. Unlike the price-weighted DJIA, the S&P500 reflects broader market health. Its average annual return is ~10% since 1926. The FED watches the S&P500 for economic signals—drops often precede recessions. Investors use its P/E (historically 15–25x) to gauge valuations. ESG versions (e.g., S&P 500 ESG Index) exclude tobacco/fossil fuel firms.