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The S&P 500 is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States.
In Depth
It is widely considered one of the best gauges of large-cap U.S. equities and the overall health of the American stock market. Companies are selected based on criteria like market size, liquidity, and sector representation. Many investment funds, such as index funds and exchange-traded funds (ETFs), aim to replicate the performance of the S&P 500.
Example
An investor might choose to invest in an S&P 500 index fund to gain broad exposure to the U.S. stock market.