Legal Definitions - Standard and Poor’s 500 (S&P 500)

Standard and Poor’s 500 (S&P 500) is a list of the 500 biggest public companies in the United States. It shows how well these companies and the economy are doing. The S&P 500 measures the size of companies by their market capitalization, which is the total value of all their shares of stock.

For example, if a company has 1 million shares of stock and each share is worth $10, then the company's market capitalization is $10 million. The S&P 500 includes companies from different industries, such as technology, healthcare, and finance.

The S&P 500 is important because it gives investors an idea of how the stock market is doing overall. If the S&P 500 goes up, it means that the stock market is generally doing well. If it goes down, it means that the stock market is not doing as well.