Skip to content
Know.itKnow.it
Create an animated lesson
On request

This article is free to read. Creating a lesson uses your daily or stored credits; review the language and settings before starting.

What is a stock index?

FinanceLesson on requestFree to read

Quick answer

A stock index measures the performance of a group of stocks, giving a quick snapshot of how a market or sector is doing. Famous examples include the S&P 500 and the Nifty 50 — when people say 'the market is up', they usually mean an index rose.

Key things to understand

  1. It tracks a basket of stocks as a single number.
  2. It shows how a market or sector is performing.
  3. Examples: S&P 500, Nifty 50, FTSE 100.
  4. Index funds and ETFs let you invest in a whole index.

People also ask

What is a stock index?
A measure of the combined performance of a group of stocks, used to gauge a market or sector.
What are examples of stock indexes?
The S&P 500, Dow Jones, Nasdaq, India's Nifty 50, and the UK's FTSE 100.
How do you invest in an index?
Through index funds or ETFs that hold the same stocks as the index, tracking its performance.