The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of December 31, 2020, more than $5.4 trillion was invested in assets tied to the performance of the index.
The S&P 500 tracks the market capitalization of the companies in its index. Market cap is the total value of all shares of stock that a company has issued. It's calculated by multiplying the number of shares issued by the stock price. A company that has a market cap of $100 billion receives 10 times the representation as a company whose market cap is $10 billion. The total market cap of the S&P 500 was $34 trillion as of January 2022.
A committee selects each of the index's 500 corporations based on their liquidity, size, and industry. It rebalances the index quarterly, in March, June, September, and December.
A company must be in the United States and have an unadjusted market cap of at least $13.1 billion to qualify for the index. At least 50% of the corporation's stock must be available to the public. Its stock price must be at least $1 per share. It must file a 10-K annual report. At least 50% of its fixed assets and revenues must be in the United States. Finally, it must have at least four consecutive quarters of positive earnings.
Top 10 Companies in the S&P 500:
Apple Inc. (AAPL)
Microsoft Corp. (MSFT)
Amazon.com Inc. (AMZN)
Alphabet Inc. A (GOOGL)
Tesla, Inc (TSLA)
Alphabet Inc. C (GOOG)
Meta Platforms, Inc. Class A (FB)
Nvidia Corp. (NVDA)
Berkshire Hathaway B (BRK.B)
Unitedhealth Group Inc. (UNH)