Stocks 101: Lesson 2 of 5

Stock Market Indices 

  • Overview of stock market indices 
  • Key indices (e.g. S&P 500, Dow Jones, NASDAQ) 

Overview of stock market indices 

Stock market indices are benchmark measurements of the performance of a specific section of the stock market. They are used to track the performance of a particular group of stocks and provide a gauge of the overall health of the stock market. 


Key indices (e.g. S&P 500, Dow Jones, NASDAQ) 

The most widely-followed stock market indices include: 

  • S&P 500: A market capitalization-weighted index that tracks the 500 largest publicly traded companies in the U.S. 
  • Dow Jones Industrial Average (DJIA): An index that tracks 30 blue-chip stocks in the U.S. 
  • NASDAQ Composite: An index that tracks all of the common stocks listed on the NASDAQ stock exchange. 
  • FTSE 100: A market capitalization-weighted index that tracks the 100 largest companies listed on the London Stock Exchange. 
  • Nikkei 225: A price-weighted index that tracks the performance of 225 large companies listed on the Tokyo Stock Exchange. 
  • Hang Seng Index: An index that tracks the performance of the 50 largest companies listed on the Hong Kong Stock Exchange. 

These indices are considered important indicators of the performance of the stock market and are used by investors, traders, and market analysts to track the progress of the market. By following stock market indices, individuals can gain an understanding of the overall direction of the market, make investment decisions, and monitor the performance of their portfolios. 


What’s Next?

Congratulations on completing Lesson 2 of 5! But don’t stop now—there’s so much more to learn.

Happy trading, and see you on the other side of Lesson 3!

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