What are the major US stock indices

Stock index

What is the name of the most famous US stock index?

In one Stock index Securities with the same characteristics (geographical, sector, sales volume of the companies) are summarized and their development is monitored. The stock index is a key figure that shows the long-term price development of the stock market and thus enables the price to be compared at certain points in time. A stock index always refers to a base period from which the performance is measured. The stock index is often used as a sentiment indicator for an economy or industry. The most important share index in Germany is the DAX. It is calculated from the prices of a total of 30 stock corporations. Other well-known indices are the Dow Jones index in the USA and the Nikkei-225 in Japan. Depending on how dividends are taken into account, a distinction is made between price index and performance index. In the case of the price index, only the prices and adjustments through subscription rights and special payments are taken into account in the calculation. With the performance index, however, all cash dividends and other income from the shares are also taken into account. The calculation of the stock index can be either price-weighted or capitalization-weighted. With a price-weighted stock index, all stock prices are added and then divided by the total number of stocks. With a capitalization-weighted index, the stocks are included in the stock index in proportion to their market capitalization.