The S&P 500 measures the stock performance of 500 large companies by tracking the market capitalizations of these companies. It's a market-cap weighted index where the companies with the largest market caps have the most influence. The index is calculated by adding the market cap of each company in the index and then dividing by a divisor, which is proprietary to the S&P. This method allows the S&P 500 to provide a broad and representative snapshot of the U.S. equities market.
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