Open any business news app on your phone right now.

Source: Bloomberg Markets Section

Somewhere near the top, you will find three numbers. 

The Dow Jones. The S&P 500. The NASDAQ. 

All three claim to be measuring the US stock market. And on most days, all three move in the same general direction.

But here is something that will happen to you at some point as a US investor, probably within your first year. You will check the news and read that the S&P 500 fell 1.2% while the NASDAQ fell 3.1% on the same day. Or that the Dow barely moved while the S&P 500 had a significant day. You will wonder what is going on.

Nothing is going wrong. The three indices are simply measuring different things, are built from different companies, and are weighted in different ways. Understanding the difference between them is not a footnote. It is the foundation of understanding what is actually happening in the US market on any given day.