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Stock Index

Market Mechanics

A stock index tracks the combined price movement of a defined group of stocks as a single number.

The S&P 500 weights roughly 500 large US companies by float-adjusted market value; the Dow Jones Industrial Average weights 30 stocks by price; the Nasdaq-100 covers the 100 largest non-financial companies listed on Nasdaq. You cannot buy an index itself; you invest in it through funds that track it.

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More in the Guide

Index Fund or Single Stock?Not two answers to the same question: one buys the market, the other buys a company, and the risks come from different places.What Is an Index?Where the number called the S&P 500 comes from — and why it behaves differently from the Dow.