How Indices Are Constructed
- Market Capitalization-Weighted: Some indices, like the S&P 500, are weighted based on the market capitalization of their constituent stocks. Larger companies have a greater influence on the index’s performance.
- Price-Weighted: Indices like the Dow Jones Industrial Average are price-weighted, meaning companies with higher stock prices have a more significant impact on the index.
- Equal-Weighted: Some indices, like the equal-weighted S&P 500, assign the same weight to each stock, regardless of size, offering a more balanced representation across all companies.
US Markets
S&P 500, Dow Jones Industrial Average, NASDAQ-100.
Asia
Nikkei 225 (Japan), Hang Seng (Hong Kong), Shanghai Composite (China).
Europe
FTSE 100 (UK), DAX (Germany), CAC 40 (France).