What Drives Equity Indices
Just wondering what are the factors that drive the movement of stock indices (e.g.: S&P 500, Nasdaq 100, Dow, etc.). How big of an impact does a big company have on stock indices? Thanks.
The fed
The FED, the economy, the sector's performance, etc. They're aggregates. A big company can move an index a few points.
Also you can just do the math - the index weights per company are readily available out there. 1 company can't move the S&P much (500) while 1 company can and often does move the DOW (30)
A company that has a lot of media attention, like Apple, can affect an index because people will assume that it's representative of the sector. However, when you're looking at indices, it's far more effective to look at the sector holostically. Getting too caught up in tunnel vision wondering how one company can affect things is a bad idea.
Honey boo boo's demand for cheese balls
Can't tell if this is a serious question or not (people have taken it surprisingly serious.
In short the indices performance can be attributed to the individual members. Members have criteria requirements, I.E. Trading volume, etc.
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