The Standard & Poor's 500 chart measures the performance of 500 stocks chosen in regard to various characteristics, including performance and liquidity, and is considered a leading indicator of assets in the United States, according to Investopedia. It measures the risks and returns of investments of large-cap companies, or those with market capitalization above $10 billion.
Along with the Dow Jones Industrial Average, the S & P 500 is one of the most commonly used charts to measure the overall performance of the market, reports Investopedia. The Dow Jones Index, however, only contains 30 stocks, and thus analysts often agree the S & P 500 is a more precise reflection of the overall state of the market in the United States. The S & P 500 offers investors a variety of ways to invest in the assets on the list, including index funds and exchange-traded funds. Investments such as index funds include all 500 of the stocks listed and are typically out of reach for an individual investor.
Standard & Poor's also provides indices of mid-cap companies with capitalizations between $2 billion and $10 billion, known as the S & P 400, explains Investopedia. Its list of small-cap companies with capitalizations between $300 million and $2 billion is known as the S & P 600.