When a professional fund manager in New York says “the market was up 1.5% today”, they mean the S&P 500.

When your Indian mutual fund’s factsheet compares its US equity returns to “the benchmark”, they mean the S&P 500.

When analysts argue about whether US stocks are expensive or cheap, they are almost always looking at the S&P 500’s price-to-earnings ratio.

It is the benchmark not just for the US, but for global equity performance in general.

The S&P 500 was launched in 1957. It tracks 503 large companies listed in the US and covers roughly 80% of the available US market capitalisation. 

As of January 2026, those companies together are worth approximately $62 trillion. To put that in perspective, it is larger than the entire GDP of every country on Earth except the US.

The methodology is what professionals call float-adjusted market cap weighting. Here is what that means in plain language. Companies are ranked by their total market value, but only counting shares that ordinary investors can actually buy and sell. Shares held by founders, governments, or locked-up early investors that cannot be freely traded are excluded. The result is a weight for each company that reflects how much of the index you would realistically hold if you tried to mirror it.

Getting into the S&P 500 is not automatic. A company must be US-incorporated, listed on a major exchange, have a market cap of at least $22.7 billion, post positive earnings across the most recent four quarters combined, and meet minimum liquidity requirements. A committee at S&P Dow Jones Indices makes the final call. This human element is important to remember. The S&P 500 is not a purely mechanical list. Real people decide who gets in.

And when a company gets in, something remarkable happens. Every single index fund and ETF that tracks the S&P 500 must immediately buy that stock. There are trillions of dollars in such funds. The buying pressure on the new entrant can be enormous even before it has done anything differently as a business. This is one of the quiet, structural features of how modern passive investing works.

The index rebalances quarterly. Companies that no longer meet the criteria get removed, and new ones that qualify get added. That third Friday in March, June, September, and December is a date that professional traders watch very carefully.

As of early 2026, here is where the weight sits at the top:

Source: S&P Dow Jones Indices, early 2026

Those ten companies together account for about 38% of the entire index. So when you buy an “S&P 500 fund”, you are buying something that puts more than one rupee into just ten companies. We will come back to what that means for you in a moment.