US Stock Market Indexes

The three most popular indexes in the US are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. There are about 5,000 others, but these are the most broadly followed, and act as a barometer for the US markets as a whole. When the media reports on overall stock market performance, they are likely speaking of one or all three of these indexes.

A trader can’t invest in an index, as the index is merely a tool for representing a basket of underlying securities, however, exchange-traded funds (ETFs) unlock this capability. There are other ways to mirror the performance of an index but ETFs are the cheapest and easiest.

The best way to think of an index is as a benchmark. Let’s take a look at a few major indexes in the US markets and what securities they are tracking.