The S&P 500 is the most important number in investing. Here's what it actually is, how it works, and how to invest in it.
The S&P 500 (Standard & Poor's 500) is a stock market index that tracks the 500 largest publicly traded companies in the United States. It's widely considered the single best measure of U.S. stock market performance and is the benchmark that nearly every professional investor compares their results against.
When you hear "the market was up 1% today" or "the market crashed," people are almost always talking about the S&P 500.
The S&P 500 includes 500 of the largest U.S. companies across all major industries, selected by a committee based on market capitalization, liquidity, and financial viability. As of 2026, the top holdings include:
These top 10 companies make up roughly 30-35% of the entire index. The remaining 490 companies make up the rest.
The S&P 500 is a market-cap weighted index. This means larger companies have more influence on the index's performance. Apple, with its massive market capitalization, affects the S&P 500 far more than a smaller company.
The index is maintained by S&P Dow Jones Indices, a division of S&P Global. A committee meets regularly to add or remove companies based on set criteria — companies must have positive earnings, meet liquidity requirements, and be U.S.-headquartered.
The S&P 500 has an extraordinary long-term track record:
You can't invest directly in the S&P 500 index itself — it's just a measuring tool. But you can invest in index funds that track it:
Open a brokerage account at Fidelity, Vanguard, or Schwab, search for any of these fund tickers, and buy shares. That's all it takes to own a piece of the 500 largest U.S. companies.
The S&P 500 covers about 80% of the total U.S. stock market by value. A Total Market index fund adds mid-cap and small-cap stocks for slightly broader diversification. Both are excellent choices — the performance difference over time is minimal.