Overview of the S&P 500
- The S&P 500 is a stock market index maintained by S&P Dow Jones Indices.
- It comprises 503 common stocks issued by 500 large-cap companies traded on American stock exchanges.
- The index includes about 80 percent of the American equity market by capitalization.
- It is weighted by free-float market capitalization, giving more weight to more valuable companies.
- The index constituents and weights are updated regularly using rules published by S&P Dow Jones Indices.
Examples of S&P 500 Companies
- A. O. Smith
- Adobe Inc.
- Apple Inc.
- Arthur J. Gallagher & Co.
- Bath & Body Works, Inc.
- BRK.B
- Broadcom Inc.
- BF.B
- Caterpillar Inc.
- Corning Inc.
Updates and Changes in the S&P 500
- S&P Dow Jones Indices periodically updates the components of the S&P 500.
- Changes are made in response to acquisitions or to reflect changes in company valuations.
- Between January 1, 1963, and December 31, 2014, 1,186 index components were replaced.
- Examples of recent changes include Uber, Sealed Air, Jabil, and Alaska Air Group.
- Microsoft's acquisition of Activision Blizzard and Danaher Corporation's spin-off of Veralto were also significant changes.
Market Capitalization Changes
- Market capitalization changes often lead to adjustments in the S&P 500 constituents.
- Companies with increasing market capitalization may be added to the index.
- Companies with decreasing market capitalization may be removed from the index.
- Examples of changes due to market capitalization include Hubbell, Lululemon Athletica, and SolarEdge.
- Johnson & Johnson's acquisition of Abiomed and Fortune Brands Home & Security's spin-off of MasterBrand were also driven by market capitalization changes.
Other Factors Influencing Changes
- Factors other than market capitalization can also drive changes in the S&P 500.
- Acquisitions and mergers between companies can impact the index composition.
- Examples include Elon Musk's acquisition of Twitter and Canadian Pacific's acquisition of Kansas City Southern.
- Spin-offs and corporate restructuring can also lead to changes in the index.
- Examples include General Electric's spin-off of GE HealthCare and Merck & Co.'s spin-off of Organon.
The S&P 500 is a stock market index maintained by S&P Dow Jones Indices. It comprises 503 common stocks which are issued by 500 large-cap companies traded on American stock exchanges (including the 30 companies that compose the Dow Jones Industrial Average). The index includes about 80 percent of the American equity market by capitalization. It is weighted by free-float market capitalization, so more valuable companies account for relatively more weight in the index. The index constituents and the constituent weights are updated regularly using rules published by S&P Dow Jones Indices. Although called the S&P 500, the index contains 503 stocks because it includes two share classes of stock from 3 of its component companies.
