Fact Check: "The S&P 500 is a stock market index that measures the performance of 500 large companies."
What We Know
The S&P 500, or Standard & Poor's 500, is indeed a stock market index that tracks the performance of 500 leading companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices and accounts for approximately 80% of the total market capitalization of U.S. public companies, with a collective market cap exceeding $49.8 trillion as of March 31, 2025 (source-1). The index is maintained by S&P Dow Jones Indices, which selects its components based on criteria such as market capitalization, liquidity, and public float (source-5).
Analysis
The claim that the S&P 500 measures the performance of 500 large companies is accurate and well-supported by multiple credible sources. According to Investopedia, the S&P 500 is a market capitalization-weighted index made up of 500 of the largest public companies in the U.S. This means that larger companies have a greater impact on the index's performance than smaller ones. The index serves as a benchmark for the overall health of the U.S. stock market and is widely used by investors to gauge market trends.
The reliability of the sources used to substantiate this claim is high. Both Wikipedia and S&P Dow Jones Indices are reputable sources of financial information. Wikipedia provides a comprehensive overview of the S&P 500, including its history and structure, while S&P Dow Jones Indices offers detailed insights into the index's methodology and significance in the financial markets (source-1, source-5).
Furthermore, the claim aligns with the general consensus in financial literature, as noted by Fidelity, which describes the S&P 500 as representing hundreds of the largest companies in America (source-8).
Conclusion
Verdict: True
The claim that "The S&P 500 is a stock market index that measures the performance of 500 large companies" is true. The evidence from multiple credible sources confirms that the S&P 500 is a well-established index that accurately reflects the performance of a diverse group of significant U.S. companies.
