Major equity index
Index
What it is
Aggregate measure of the performance of a representative basket of stocks from a market or segment. Examples: S&P 500 (500 largest US), Nasdaq 100 (US tech), TSX 60 (60 largest Canadian), Russell 2000 (US small-cap), Dow Jones (30 US large-caps).
How to read it
Each index tells a different story. S&P 500 = US economy health. Nasdaq = appetite for tech and growth. TSX = exposure to natural resources and Canadian banks. Russell 2000 = health of mid-sized domestic businesses. Watching DIVERGENCES between indices is often more informative than watching a single one.
Common reference points
- Compare to 50/200 moving averages—
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
Cap-weighted indices are dominated by a few names (top 10 of S&P 500 ≈ 35% of the index in 2024). A rising index doesn't mean most stocks are rising — check the "breadth" with equal-weighted versions.
Other measures — Market
Educational content. Polaris is not a registered investment adviser and makes no recommendation.