Understanding US Markets: NASDAQ, Dow Jones, and S&P 500

Orange Lightning

An overview of the NASDAQ Composite, S&P 500, and Dow Jones Industrial Average, key indexes in the US stock market.

1

What Are NASDAQ, S&P 500, and Dow?

Measures of stock market performance, basis for investment products, and indicators of economic health.

2

Composition Differences

NASDAQ and S&P 500 cover more companies in various sectors compared to the Dow, which includes 30 blue-chip stocks.

3

Weighting Methods

NASDAQ and S&P 500 are market cap-weighted, while the Dow is price-weighted, affecting their overall index performance.

4

Selection Criteria

NASDAQ and S&P 500 use quantitative criteria for inclusion, while the Dow uses a mix of quantitative and qualitative factors.

5

NASDAQ Composite Overview

Launched in 1971, it includes over 3,400 stocks, mainly from the tech sector, and is capitalization-weighted.

6

S&P 500 Overview

Established in 1957, tracks 500 large-cap stocks, representing diverse industries, and is a market cap-weighted index.

7

Dow Jones Overview

Introduced in 1896, includes 30 large-cap blue-chip stocks, price-weighted, and covers various industries.

8

Performance Variations

Each index reacts differently to market conditions; the S&P 500 is more volatile, while the Dow reflects blue-chip stability.

9

Investing in Indexes

Each index reacts differently to market conditions; the S&P 500 is more volatile, while the Dow reflects blue-chip stability.

10

Investing in Indexes

These indexes track market performance and offer investment opportunities without picking individual stocks.