The S&P 500 explained: what it holds, how it’s built, and the ES and MES futures
The 500 companies behind the most-watched index in the world, how they get picked and weighted, and what that means when you trade ES or MES.
When people say “the market was up today,” they usually mean the S&P 500. It's the benchmark most fund managers are measured against, and the index behind ES and MES, two of the most-traded futures contracts in the world. Knowing what's inside it helps you understand why it moves.
What it is
The S&P 500 tracks about 500 of the largest U.S. companies. It started in its current form in 1957 and is run by S&P Dow Jones Indices. Together, its companies make up roughly 80% of the value of the U.S. stock market, so it's the closest thing to a single number for how American companies are doing.
How companies get in
- A committee decides, using published rules rather than a simple top-500 list.
- Size: the company has to be large, measured by market value (share price × shares).
- Profits: it needs positive earnings over the most recent year.
- Trading: enough of its shares must be available and trade actively.
Changes are announced ahead of time and usually take effect around the quarterly rebalance. Being added often moves a stock, because funds that track the index have to buy it.
How it’s weighted
The S&P 500 is weighted by market value. The bigger the company, the more it moves the index. That's why a handful of giant tech companies can lift or drag the whole index on their own; the Magnificent 7 are a big share of it. A 5% move in the largest company moves the index far more than a 5% move in the smallest.
The S&P 500 isn't 500 equal votes. The largest companies speak the loudest.
The futures: ES and MES
| Contract | Value of 1 point | Smallest move (0.25) | Hours |
|---|---|---|---|
| ES (E-mini S&P 500) | $50 | $12.50 | Sunday 6 p.m. to Friday 5 p.m. ET, daily break 5–6 p.m. |
| MES (Micro E-mini) | $5 | $1.25 | Same as ES |
ES tends to move fewer points in a day than NQ and is often described as steadier. For a full comparison, see ES vs NQ vs the micros, and for the hours, futures market hours.
What moves it
- Interest rates and the Fed: see the Fed and interest rates.
- Inflation and jobs data at 8:30 a.m. ET. See CPI explained.
- Earnings from the biggest companies, which carry the most weight. See earnings season and the indexes.
If you trade ES, note in your journal which days had big news. Market Matrix's filters let you compare your results on those days with quiet ones.
This article is for education only and isn't financial advice. Trading futures involves substantial risk of loss. Index rules, weights and contract specifications come from the index providers and exchanges and can change.