What the S&P 500 is: how it is built, who decides and how you invest in it

The S&P 500 is an index: a number summarising what a specific group of large US companies is worth on the stock market. It is calculated and maintained by S&P Dow Jones Indices, a private company. It was first published on March 4, 1957, and its backfilled series starts on January 3, 1928.

Companies do not weigh the same. The index weights by float-adjusted market capitalization: it counts what each company is worth, but only the portion of its shares actually in the market's hands, leaving out those locked up with founders, families or states. A company worth twice as much as another weighs twice as much.

503 constituents, 500 companies. The difference comes from dual share classes: Alphabet (GOOGL and GOOG), Fox (FOXA and FOX) and News Corp (NWSA and NWS) each trade on two lines. That is why some counts say 500 and others 503, and both can be right depending on what is being counted. On this site the index list holds 503 symbols, and the pages that count companies, such as the eleven sectors, group the dual classes and get 500.

What the index measures is price: the version everyone sees excludes dividends, and the total-return version, with dividends reinvested, rises considerably more. What every index company pays is in S&P 500 dividends.

Source: the official S&P 500 fact sheet, data as of August 31, 2026, downloadable from the index's page at S&P Dow Jones Indices.

A committee decides, not a list sorted by size. This is the most repeated confusion: the S&P 500 is not automatically the 500 largest companies in the United States. An index committee at S&P Dow Jones Indices picks them, applying published requirements and also weighing the balance between sectors. A very large company can stay out for years if it fails one of the requirements, and that does happen.

These are the requirements summarised in the index's official fact sheet as of August 31, 2026:

The market-cap bar is reviewed every quarter so that it keeps reflecting the market, so the USD 22.7 billion figure belongs to this date and will change. The positive earnings requirement is the one that keeps the most familiar names out: a very large company losing money does not get in, however much it is worth.

In June 2026 S&P Dow Jones Indices consulted the market on whether to grant exceptions for megacap companies — waiving the seasoning period after an IPO, the minimum float or the earnings requirement — and decided to grant none: the criteria for the S&P 500, MidCap 400 and SmallCap 600 stayed as they were.

Sources: the criteria summary in the index fact sheet as of August 31, 2026, the S&P U.S. Indices methodology in its July 2026 edition, and the MegaCap consultation results of June 4, 2026. A practical note: S&P Global's server refuses automated downloads and sometimes manual ones too; if the methodology link does not open, an earlier edition of the same document (March 2015) is mirrored on the public SPICE server and shows the structure of the rules and how the thresholds have moved, checked on September 20, 2026.

There is no annual date on which the list is refreshed. Changes are announced as needed, with one to five days' notice, and separately the index is rebalanced every quarter: in March, June, September and December. Exits usually happen for one of these reasons:

• The company stops existing as such. It is acquired, merges or goes private. It is then removed, normally at the close of its last trading day.
• It persistently stops meeting the criteria. And here is a nuance the methodology itself stresses: the criteria are for addition, not for continued membership. A company that breaches them temporarily is not deleted; the condition has to be ongoing.
• It makes room for another. When a new company joins, another has to leave, and sector balance weighs in there.

How this shows up on this site. The earnings calendar keeps the page of nine companies that are no longer in the index, because their history is still valid: AAP, CAG, CPB, EPAM, POOL, R and UA left the S&P 500 and still trade; AVB stopped trading on August 14, 2026 when Equity Residential absorbed it, and EA on August 4, 2026 when it was bought and taken private. That is why the earnings-date table lists 509 rows while the figures above count 500: having a page on this site and being in the index today are two different things.

At the August 31, 2026 close, this is how the 500 companies split by sector under this site's data provider's classification, with each sector's weight and its median P/E:

Data from the sectors page, August 31, 2026 close. The weight is the sector's total market value over the index's, without the float adjustment S&P applies, so it is indicative. The classification is the market-data provider's, similar to but not identical to GICS: Alphabet and Meta sit in Communication Services, and Amazon in Consumer Cyclical.

Concentration is the figure that surprises most people. At that same close and with that same unadjusted calculation:

• The ten largest companies add up to 39.3% of the index's value; the five largest, 29.5%.
• 22 companies are enough to reach half the value of all 500.
• The 250 smallest — half the list — add up to 8.5% between them.

S&P's official figure at the same date is 37.8% for the ten largest constituents, with the largest single one at 8.1%. It is slightly lower than ours for two declared reasons: S&P adjusts for free float and counts Alphabet's two classes as two of those ten slots, while here Alphabet counts as one company. Both figures say the same thing: buying the S&P 500 is mostly buying a handful of very large companies.

If that split by size looks too lopsided to someone, there is an equal-weight version in which all 500 weigh the same. What changes, and what each one has returned, is measured in the equal-weight versus cap-weighted guide.

• It is not the whole US stock market. Its own fact sheet says it covers approximately 80% of available market capitalization in the United States. Thousands of companies trade on US exchanges; the index holds 503 constituents.
• It holds no small caps. Mid-sized companies sit in the S&P MidCap 400 and small ones in the S&P SmallCap 600, two indices of the same family that do not overlap holdings with the 500. The three together form the S&P Composite 1500.
• It is not "the 500 largest", and it holds no foreign companies. A committee picks them, with requirements on earnings, liquidity and float; the companies have to be US companies and ADRs do not qualify. An index like the Nasdaq-100 does admit companies from abroad: the comparison is in S&P 500, Nasdaq-100 or MSCI World.
• It is not a product you buy. It is a calculation. What you buy is a fund or an ETF that tracks it, with its fees and its tracking difference.
• It guarantees nothing. It has had long, deep falls, and past returns do not anticipate future ones. What maximum drawdown and volatility mean is in the Sharpe ratio and drawdown guide.

Someone tracking this index broadly has two wrappers. The important difference between them is not the return, it is the tax treatment, and it depends on where you live. In Spain, for example:

• Index fund (not exchange-traded). Money can be moved from one fund to another without paying tax at that moment — the traspaso of article 94 of the Spanish income tax law — between registered entities and without the money passing through the holder's account.
• ETF (exchange-traded fund). The same article excludes it from that mechanism, and since January 1, 2022 the exclusion also covers ETFs listed on foreign exchanges. Every sale is declared.

When finally sold, both are taxed the same way, as savings income. The details, with dividends, the US withholding and the W-8BEN form, are in how US shares are taxed in Spain, and the route of opening an account and picking a wrapper is in how to invest in the S&P 500 from Spain.

Costs are small but they rule over the long run. As an order-of-magnitude reference, iShares' fact sheet as of August 31, 2026 gave its S&P 500 ETF ongoing charges of 0.07% a year; other products carry different costs and the broker may charge separately. Anyone investing in euros also adds the exchange rate: how much that changes the arithmetic shows up in the S&P 500 calculator. This guide does not say which product suits anyone and names no brokers.

How many companies are in the S&P 500?

As of August 31, 2026, the official S&P Dow Jones Indices fact sheet counted 503 constituents. That is not 503 companies: three of them have two share classes listed separately (Alphabet, Fox and News Corp), so it is 500 companies across 503 listed lines. This site uses that same list of 503 and groups the dual classes whenever it counts companies.

Who decides which companies join or leave the S&P 500?

A committee at S&P Dow Jones Indices, not an automatic formula. The committee applies published requirements (a minimum unadjusted market cap of USD 22.7 billion, public float, liquidity and positive earnings in the most recent quarter and in the last four quarters summed) and also weighs the balance between sectors. There is no annual reconstitution: changes are made as needed, and the index is rebalanced quarterly, in March, June, September and December.

How much do the ten largest S&P 500 companies weigh?

37.8% of the index as of August 31, 2026, according to the official S&P Dow Jones Indices fact sheet, which weights by float-adjusted market cap and counts Alphabet's two classes as two of those ten. With this site's simpler calculation, without the float adjustment and grouping dual classes, the ten largest companies add up to 39.3% and the five largest to 29.5%, at the same close.

Is the S&P 500 the whole US stock market?

No. It is 503 constituents of large companies, and the index fact sheet itself says it covers approximately 80% of available market capitalization in the US. Mid-sized and small companies sit in other indices of the same family, the S&P MidCap 400 and the S&P SmallCap 600. Foreign companies trading in New York through ADRs are not eligible either.

Can you buy the S&P 500 directly?

The index is a calculation, not a product: what you buy is an index fund or an ETF that tries to track it, and that brings fees, tracking differences, the exchange rate if you invest in euros, and each country's tax treatment. This guide explains how the index works; it does not say which product suits anyone, and it is no substitute for a licensed adviser.

• Everything carries a date. The figures are from the August 31, 2026 close. Membership changes several times a year and the weights change every day.
• Two ways of measuring weight. The official one adjusts for free float; this site's does not. That is why "the ten largest" come out at 37.8% for S&P and 39.3% here. Neither is a mistake: they are two definitions, and each figure says which one it uses.
• The sector classification is not GICS. It is this site's market-data provider's, similar but not identical, so the per-sector company count may not match other sources.
• The index's median P/E, 24.4, comes from earnings filed with the SEC at the August 31, 2026 close. S&P published 24.94 with data as of March 31, 2026: two calculations and two dates, close, not equal.

More guides: how to read a Quant500 company page, equal weight versus cap weight and S&P 500, Nasdaq-100 or MSCI World; all of them in the guides. The terms are in the glossary. How this site's scores are computed is in the methodology.