What Is S&P 500?
A stock market index tracking 500 of the largest publicly traded US companies.
The Full Definition
The S&P 500 (Standard & Poor's 500) is a market-capitalization-weighted index of 500 of the largest US companies, widely used as the benchmark for the overall US stock market. Because it's weighted by size, its largest companies — currently dominated by a handful of mega-cap technology firms — have an outsized effect on its movement. The S&P 500 has historically returned roughly 10% annualized before inflation over long periods, making it the standard yardstick most investors and fund managers are measured against.
Real-World Example
When financial media says "the market was up 1% today," they're almost always referring to the S&P 500. A fund described as "tracking the S&P 500" — like VOO or SPY — simply owns all 500 companies in proportion to their market value.