A stock index tracks a group of companies to show how a market segment is performing.
An index is a market benchmark
An index is a market benchmark
Indexes help traders understand broad market performance.
The S&P 500 tracks 500 large US companies. The Nasdaq Composite tracks many technology-heavy companies listed on Nasdaq.
You cannot buy an index directly, but you can trade products that track one.
Why indexes matter
Why indexes matter
Indexes show whether a move is broad or limited to one company.
If one stock rises while the broader index falls, the move may be company-specific.
Index products can also help beginners get diversified exposure without picking individual stocks.
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