Major U.S. Stock Market Indices

Not every stock index answers the same question. Some indices emphasize large established companies, some represent a broader slice of the U.S. equity market, and others are watched closely because of their growth or technology concentration. That is why investors should avoid treating all headline index moves as interchangeable.

This section focuses on three of the most widely cited U.S. stock benchmarks: the Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite. Each is useful, but each is useful for a different reason. The exam-relevant task is to connect the benchmark to its construction method, sector mix, and typical use as a market reference.

In this section

• The Dow Jones Industrial Average as a Price-Weighted Benchmark
  Understand what the Dow measures, how its price-weighted method works, and why it is useful but limited as a stock-market benchmark.
• The S&P 500 as a Broad-Market Benchmark
  Learn why the S&P 500 is the default U.S. large-cap benchmark and how its market-cap weighting shapes investor use.
• The NASDAQ Composite and Growth-Heavy Market Exposure
  Understand why the NASDAQ Composite is associated with technology and growth stocks, and what it does and does not signal about the market.