Nasdaq-100
The Nasdaq-100 is a prominent stock market index comprising equity securities from 100 of the largest non-financial companies listed on the Nasdaq Stock Market. Established in 1985, it serves as a benchmark for the performance of major technology, retail, telecommunications, biotechnology, and healthcare companies, excluding financial institutions, which are tracked by the Nasdaq Financial-100.
Composition and Eligibility
The index includes only non-financial companies, which distinguishes it from other indices such as the S&P 500 that incorporate financial entities. Companies must be listed exclusively on the Nasdaq Stock Market to be eligible. The Nasdaq Composite and the Nasdaq-100 are closely related in composition, but the latter is a more focused index, often containing companies with substantial market capitalization and liquidity.
Trading and Derivatives
The Nasdaq-100 is widely used in derivative markets, including options and futures. Notably, the E-mini NASDAQ-100 futures are traded on the Chicago Mercantile Exchange and are a popular tool for investors seeking exposure to the index's performance. Invesco QQQ, an exchange-traded fund, also tracks the Nasdaq-100, providing an investment vehicle that mirrors the index's movements.
Historical Performance and Significance
The Nasdaq-100 has historically been a bellwether for the U.S. technology sector due to its concentration of tech companies. Its performance is often seen as indicative of broader trends within the high-tech economy. The index's constituents are known for innovation and rapid growth, which contribute to its dynamic nature. This is evident during market shifts, such as the dot-com bubble and subsequent recovery phases.
Influence and Global Impact
Globally, the Nasdaq-100 has a significant influence, with numerous international companies listed as part of the index. Companies from diverse sectors such as software, hardware, semiconductors, and consumer electronics are commonplace. Its impact is further illustrated by the presence of international companies like Check Point Software Technologies, highlighting its global reach.
Related Indices and Competitions
While the Nasdaq-100 is a major index, it is often compared to, and competes with, other indices like the Dow Jones Industrial Average and the [S&P 500]. However, its focus on high-growth, non-financial sectors differentiates it, providing a unique perspective on the economic landscape.