Term U.S. Stock Market Returns

Maria James

Stock Market

Comprises three-the stock market is the lifeblood of any economy, and it’s a key indicator of how well an economy is doing. The U.S. stock market has been one of the most volatile over time, but as measured by its average annual return over 10 years (from 1926 to 2016), stocks have outperformed bonds twice as often as they’ve underperformed them.

S&P 500

The S&P 500 is a stock market index that tracks the performance of the common stocks listed on the New York Stock Exchange (NYSE) and Nasdaq. It includes 500 of America’s largest companies, which makes it one of the most widely followed indices in the world.

Standard & Poor’s Corporation (S&P) has used as an indicator for U.S. equity markets since its inception in 1957 the S&P 500dex comprises comprise sted combination of 25% utility shares, 25% industrial goods sectors and 50% communications sectors; it is designed so that each sector reflects approximately half its weight within the total composite index.*

The broad market nature of this index means that companies from all industries fall within its scope—from technology firms such as Apple Inc., Microsoft Corporation or Google Inc., through healthcare companies like Johnson & Johnson or Pfizer Inc., down to consumer staples firms like Procter & Gamble Co..


The NASDAQ 100 comprises the 100 largest non-financial companies listed on the NASDAQ stock exchange. The index was launched in 1994 and has been one of the most popular benchmarks for U.S.-based stocks since its inception.

The Nasdaq 100 is a market-capitalization-weighted index with an emphasis on growth rather than value or momentum—that is, it weights each company based on their current market capitalization relative to other firms within their industry sector (rather than any other factor).

Dow Jones Industrial

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and NASDAQ. It was first published in Dow Jones New York Stock Market Review on May 14, 1896.

The DJIA is one of the most followed indexes in the world.

These are the major indexes to watch

The S&P 500 is a broad-based market index that tracks the performance of 500 large companies in the U.S. stock market. It comprises:

  • The biggest 500 companies by market value, as determined by Standard & Poor’s (S&P) based on their latest quarterly closing share prices on April 30th, 2019.
  • A total market capitalization weighting for each company based on its own size relative to other companies as measured by revenues and profits. Over a rolling three year period from 2017Q2 through 2019Q2 ending June 30th each year with an average of 3 years. Being used per quarter while also considering their relative weightings within their peer group. At those times, when all three measures are available. Each month we add up all stocks that have been added or dropped over those same three years so far and use them to calculate how much each company contributed towards our benchmark index performance over time – this is called “returns weighted indexing”


Some of the major indices have done better than others. The S&P 500 has increased about 8 percent, a solid performance. The Dow Jones Industrial Average is up about 5 percent in 2018 so far, and the NASDAQ Composite Index has risen 2 percent this year.

  • Section: That’s not bad considering how underwhelming 2017 was for stocks.
  • Section: What’s interesting is that while the stock market continues to perform well. It’s still very volatile – even when compared with other asset classes like bonds or real estate!
  • Section: Even though 2018 has been an exceptional year for stocks overall, there are still plenty of opportunities out there if you know where to look and how much risk you want to take with your investments (which isn’t always necessary).
  • Section: Overall, though, we’re definitely living in very exciting times for investing!

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