Stock Market Index
A stock market index is a measurement that reflects the performance of a specific group of stocks. It helps investors gauge the overall health of the stock market or a particular sector. Common examples include the S&P 500, which tracks 500 large companies in the U.S., and the Dow Jones Industrial Average, which includes 30 significant U.S. companies.
Indexes are calculated using various methods, often based on the market capitalization of the included companies. They serve as benchmarks for investors to compare the performance of their own investments against the broader market trends.