What is the Nasdaq?

The Nasdaq is two things at once. It is a stock exchange, a place where shares are bought and sold and it is home to some of the most widely followed indexes in the world, most notably the Nasdaq Composite and the Nasdaq 100.

What does the Nasdaq track?

The Nasdaq Composite includes virtually every company listed on the Nasdaq exchange, which is over 3,000 stocks. The Nasdaq 100 is more selective it tracks the 100 largest non-financial companies listed on the exchange. When people refer to "the Nasdaq" in financial news, they usually mean the Nasdaq Composite.

Why is it associated with technology?

Because technology companies tend to list on the Nasdaq. Apple, Microsoft, Alphabet, Meta, Amazon, and Nvidia are all Nasdaq-listed. This gives the index a heavy tilt toward the technology sector, which makes it more volatile than the S&P 500 but also capable of stronger gains during periods of tech growth.

How does it differ from the S&P 500 and the Dow?

The S&P 500 is the broadest measure of the American market. The Dow is the oldest, the Nasdaq is the most tech-heavy. All three are useful, but they tell slightly different stories about what is happening in the market.

Why does it matter for investors?

If you invest in a Nasdaq-tracking fund, you are making a bet that is disproportionately tied to the technology sector. That can work in your favour for long stretches, but it also means sharper drops when tech falls out of favour. Understanding what an index is tilted toward helps you make more informed decisions.