In the stock market, an “index” is a benchmark that tracks the performance of a specific group of stocks or other financial assets.
It serves as a gauge for overall market conditions or the health of a particular sector.
Popular stock market indices (plural of index) include the S&P 500, which tracks 500 large U.S. companies, the Dow Jones Industrial Average, which follows 30 major U.S. companies, and the Nasdaq Composite, which includes a broad range of tech stocks.
Investors often use indices as a reference point for their own portfolios or as a basis for index funds and exchange-traded funds (ETFs).
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