S&P 500

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The S&P 500, an abbreviation for Standard & Poor's 500, is a stock index comprised of 500 large companies traded on United States stock markets. It is not necessarily the 500 largest companies, as there is a selection process that considers the track record and future prospects of a company. Often the S&P 500 is cited as a measure of how the stock market is doing.

Unlike the Dow Jones Industrial Average, the S&P500 is weighted by market capitalization, such that the larger "cap" stocks have a greater influence over the index than the smaller cap stocks do.

A notable exclusion from the S&P 500 was Tesla Motors (TSLA) on Sept. 4, 2020 (after the markets closed), probably because TSLA was considered to be so vastly overpriced that a decline in its price could have weighted down the entire S&P 500.

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