The NASDAQ Composite tracks over 3,000 stocks listed on the NASDAQ exchange. Founded on February 8, 1971, NASDAQ was the world's first electronic stock market, replacing the traditional floor-trading model. The index is heavily weighted toward technology and growth companies, making it the go-to benchmark for the tech sector.

Why It Matters

The NASDAQ Composite is dominated by mega-cap technology companies -- Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla (the so-called "Magnificent Seven") collectively represent over 40% of the index weight. Its performance directly reflects the health of the technology sector, AI investment cycle, and growth investing sentiment globally.

NASDAQ Composite vs. NASDAQ-100

The Composite includes all 3,000+ NASDAQ-listed stocks, while the NASDAQ-100 (tracked by the QQQ ETF, one of the world's most traded ETFs with ~$300B in assets) includes only the 100 largest non-financial companies. The NASDAQ-100 is used more for derivatives trading and institutional benchmarking.

Historical Events

Growth vs. Value Barometer

The relative performance of NASDAQ vs. Dow Jones reflects the rotation between growth and value investing. When NASDAQ outperforms, growth/tech is favored; when it underperforms, value/cyclical stocks are in demand. The NASDAQ/Dow ratio is widely tracked by strategists.

Rate Sensitivity

The NASDAQ is particularly sensitive to interest rate expectations. Rising rates increase discount rates applied to future earnings, pressuring high-growth tech valuations where most value lies in distant cash flows. A 50bp move in the 10-year Treasury yield can shift NASDAQ valuations by 5-10%.

Market Impact

The NASDAQ tends to be more volatile than the S&P 500 or Dow due to its growth-stock concentration. It leads risk-on rallies and amplifies risk-off sell-offs. NASDAQ futures are among the most actively traded index futures globally, alongside S&P 500 (ES) and Dow (YM) futures.