Nasdaq

Nasdaq is both a stock exchange, a marketplace where shares are bought and sold, and the name behind two of the most widely followed stock market indexes: the Nasdaq Composite, which includes virtually every company listed on the exchange, and the more selective Nasdaq 100, which tracks the 100 largest non-financial companies listed there. When people refer to "the Nasdaq" in financial news, they usually mean the Nasdaq Composite.

Technology companies have long gravitated toward listing on the Nasdaq, which gives its indexes a heavy tilt toward the tech sector compared to a broader benchmark like the S&P 500. That tilt tends to make Nasdaq indexes more volatile, with sharper gains during periods of strong tech performance and sharper drops when the sector falls out of favor.

An investor buying a fund that tracks a Nasdaq index is, in effect, making a concentrated bet on technology rather than the broader economy, which is worth understanding before assuming it behaves like a standard broad-market index.