S&P 500 facts for kids

S&P 500

S&P 500 Index from 1970 to 2023
Foundation	March 4, 1957; 68 years ago (1957-03-04)
Operator	S&P Dow Jones Indices
Exchanges	NYSE Nasdaq Cboe BZX Exchange
Trading symbol	^GSPC $SPX SPX .SPX .INX
Constituents	503
Type	Large-cap
Market cap	US$52.614 trillion (as of May 30, 2025)
Weighting method	Free-float capitalization-weighted
Related indices	S&P 1500 S&P Global 1200 S&P 100

Though there is large variability in month-to-month changes in the S&P 500 index (gray lines), a seasonal pattern emerges when the monthly change values are averaged (bold line).

S&P 500 Max Min Chart to Jan 2025 with Trend, with plots less Inflation, and comparison plots

The Standard and Poor's 500, often called the S&P 500, is a special list that tracks how well the stocks of 500 big companies in the United States are doing. Think of it like a report card for a large part of the U.S. economy! It includes about 80% of the total value of all public companies in the U.S.

What is the S&P 500?

The S&P 500 is a stock market index. This means it's a way to measure the performance of a group of stocks. It helps people understand how the overall stock market is doing. The companies on this list are chosen because they are leaders in their industries.

The S&P 500 is a "capitalization-weighted" index. This means that bigger companies (companies with a higher total value of their shares) have a greater impact on the index's movement. For example, a few very large companies like Microsoft, Nvidia, and Apple make up a big part of the index's total value.

The S&P 500 is managed by a group called S&P Dow Jones Indices. A special committee decides which companies get to be part of this important list.

How Companies are Chosen for the S&P 500

To be included in the S&P 500, companies need to meet certain requirements. A committee carefully looks at each company. Here are some of the main things they consider:

• Company Size: The company must be very large, with a high total value of its shares (called Market capitalization).
• Active Trading: Its shares must be traded very often, showing that many people are buying and selling them.
• Public Listing: The company's shares must be listed on a major U.S. stock exchange like the NYSE or Nasdaq.
• U.S. Base: The company must have its main operations in the United States.

Some types of investments, like certain partnerships or special funds, are not allowed in the S&P 500. When a company is added to the index, its stock value might go up because many investment funds that track the S&P 500 will need to buy its shares.

Investing in the S&P 500

You can't directly "buy" the S&P 500 itself, but you can invest in things that follow it.

Funds that Track the S&P 500

Many special investment funds, like index funds, mutual funds, and exchange-traded funds (ETFs), are designed to copy the performance of the S&P 500. These funds buy the same stocks as the index, in the same amounts. This way, if the S&P 500 goes up, your investment in these funds generally goes up too.

Some popular ETFs that track the S&P 500 are offered by companies like The Vanguard Group (NYSE Arca: VOO), iShares (NYSE Arca: IVV), and State Street Corporation (SPDR S&P 500 ETF Trust, NYSE Arca: SPY and NYSE Arca: SPLG). These funds allow everyday investors to easily invest in all 500 companies at once.

A Look at History

The story of the S&P 500 began a long time ago.

• In 1860, a person named Henry Varnum Poor started a company that published guides for investors.
• Later, in 1923, another company called Standard Statistics started rating bonds and created its first stock index with 233 U.S. companies.
• In 1941, Poor's Publishing merged with Standard Statistics Company to form Standard & Poor's.
• On March 4, 1957, the index grew to include 500 companies and was officially named the S&P 500 Stock Composite Index.
• In 1976, The Vanguard Group created the very first mutual fund that allowed regular people to invest in all the companies tracked by the S&P 500.
• Over the years, new ways to trade based on the index were created, making it easier for more people to get involved.

How the S&P 500 Performs

S&P 500 Buybacks and Dividends (quarterly)
     Stock buyback
     Dividends

S&P 500 annual returns

The S&P 500 has generally grown over time. Since it started in 1926, its average yearly growth, including money paid out by companies (called dividends), has been about 9.8%. This means that, on average, if you had invested in the S&P 500, your money would have grown by almost 10% each year.

While the index has had some years where it went down, it has gone up in value about 70% of the time. This shows that over the long term, the S&P 500 has been a good way to track the growth of major U.S. companies.

The S&P 500 reached its highest point ever, 6,144.15, on February 19, 2025.

Images for kids

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  A linear chart of the S&P 500 daily closing values from January 3, 1950, to February 19, 2016

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  A logarithmic chart of the S&P 500 index daily closing values from January 3, 1950, to February 19, 2016

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  A daily volume chart of the S&P 500 index from January 3, 1950, to February 19, 2016

See also

In Spanish: S&P 500 para niños

• List of S&P 500 companies
• SPDR S&P 500 ETF Trust
• S&P Dow Jones Indices