What are the top 5 most traded indices and why?
Global stock indices serve as key indicators of overall market performance, tracking the value of leading companies across major economies. Whether it’s the S&P 500, Dow Jones, Nasdaq-100, FTSE 100 or DAX 40, each index provides a distinct view of economic activity, sector dynamics and investor sentiment.
Interested in trading stock indices? Discover the world’s most traded benchmarks – from the US 500 and Wall Street 30 to the UK 100 and Germany 40 – and learn what moves them.
What is a stock market index?
A stock market index measures the performance of a selected group of shares, typically weighted by free-float market capitalisation. Some indices use other approaches, such as price or equal weighting.
Traders and investors use indices to gauge overall market performance, benchmark returns, and create index-linked products.
Two key principles define an effective index: it should be investable, with clear and replicable rules, and transparent, with its methodology publicly available.
For example, the S&P 500 (also known as the US 500) is a free-float market-cap-weighted index that covers roughly 80% of US equities by market value, with its methodology published by S&P Dow Jones Indices.
Past performance is not a reliable indicator of future results.
The 5 most traded indices
S&P 500 (US 500)
The S&P 500 tracks 500 large-cap US companies listed on the NYSE and Nasdaq. Maintained by S&P Dow Jones Indices, it is the leading benchmark for US large-cap equities, representing about 80% of the US market by capitalisation.
Why traders focus on it
- Deep liquidity in futures, options, and ETFs, broad sector representation, and extensive economic coverage make the S&P 500 (US 500) a cornerstone of global asset allocation and a key gauge of risk sentiment.
Price-history snapshot (high-level)
- Dot-com bear market (2000–02), GFC (2007–09), COVID shock (Feb–Mar 2020), and 2022 bear market are the major modern drawdowns visible in the long S&P 500 series. The index then advanced to a sequence of record highs into 2024–25 amid AI-led mega-cap strength.
Past performance is not a reliable indicator of future results.
Dow Jones Industrial Average (US Wall Street 30)
The Dow Jones Industrial Average (DJIA), also known as the US Wall Street 30, tracks 30 major US companies using a price-weighted formula. Its value is derived by summing component prices and dividing by a divisor that adjusts for splits and corporate actions. Despite its age, the Dow remains one of the most observed and cited US market gauges.
Why traders focus on it
- An iconic barometer of the US economy, supported by a highly active futures and options market. The price-weighted structure means higher-priced shares can exert outsized influence, making its composition distinct from the broader S&P 500.
Price-history snapshot (high-level)
- Long historical series show the same big cycles as the S&P 500 – sharp drawdowns in 2000–02, 2008–09, March 2020, and 2022 – followed by recoveries to fresh records into 2024–25.
Past performance is not a reliable indicator of future results.
FTSE 100 (UK 100)
The FTSE 100, also known as the UK 100, represents the 100 largest companies listed on the London Stock Exchange, ranked by free-float market capitalisation. It’s maintained by FTSE Russell (LSEG) and often viewed as a barometer of UK blue-chip performance.
Why traders focus on it
- The FTSE 100’s heavy exposure to commodities and multinational firms makes it sensitive to global growth, currency movements, and commodity cycles. This mix attracts traders using macro, hedging, or event-driven strategies.
Price-history snapshot (high-level)
- The FTSE 100 lagged the U.S. in the 2010s but set a series of record closes in 2023–2024 as energy and commodity stocks rallied and sterling weakness boosted overseas earners.
Past performance is not a reliable indicator of future results.
Nasdaq-100 (US Tech 100)
The Nasdaq-100 (NDX), or US Tech 100, comprises 100 of the largest non-financial companies listed on the Nasdaq exchange. It is free-float market-cap weighted, with caps to limit concentration in any single company. The index is heavily tilted toward technology and communications leaders across AI, cloud computing, and semiconductors.
Why traders focus on it
- Known for higher volatility and beta than the S&P 500, the Nasdaq-100 offers exposure to long-term innovation themes and has very active E-mini futures and options markets.
Price-history snapshot (high-level)
- Intense boom-bust dynamics: the 2000 dot-com peak and crash, a powerful 2010s bull run, the swift COVID-19 drawdown and rebound, a deep 2022 tech bear market, and an AI-led surge to new highs through 2024–25.
Past performance is not a reliable indicator of future results.
DAX 40 (Germany 40)
The DAX 40, or Germany 40, is Germany’s flagship equity index, tracking 40 large-cap prime-standard companies listed in Frankfurt. Expanded from 30 to 40 in 2021, it’s a free-float market-cap-weighted index with additional quality and profitability screens.
Why traders focus on it
- Features deep liquidity on Eurex, with a strong cyclical and export bias. The DAX 40 is highly responsive to the euro, global manufacturing trends, and European interest rate changes.
Price-history snapshot (high-level)
- The DAX shows pronounced cycles: 2000–03 and 2008–09 bear markets, COVID-19 shock and recovery, and record territory in 2024 amid easing energy pressures and global tech strength, with subsequent consolidation heading into 2025.
Past performance is not a reliable indicator of future results.
What could influence these indices?
- Central bank policy paths: Markets remain closely tied to monetary policy from the Federal Reserve, ECB, and Bank of England. Changes in interest rates, inflation expectations, and balance sheet policies can shift equity valuations and risk premia across all five indices.
- Earnings concentration in mega-caps: A handful of large US technology firms account for a growing share of index-level profits in the S&P 500 and Nasdaq-100, increasing market sensitivity to their earnings and forward guidance.
- FX, energy and commodities: The FTSE 100 and DAX 40 often respond sharply to movements in oil, gas, and currencies, reflecting their multinational and export-heavy composition.
- Geopolitics and supply chains: Elections, trade policies, and global security issues can influence European exporters (DAX 40), commodity-linked firms (FTSE 100), and global sentiment across the US 500, US Tech 100, and Wall Street 30.
Why are these indices so popular among traders?
- Liquidity: The S&P 500 and Nasdaq-100 offer some of the deepest and most liquid equity index futures and options markets globally, providing tight spreads and efficient execution.
- Hedging and access: Each index offers broad exposure to key economies and sectors, enabling efficient macro hedging and tactical positioning through futures, options, and ETFs.
- Volatility and opportunity: Indices vary in volatility profiles – the US Tech 100 typically carries higher beta; the DAX 40 and UK 100 reflect European and commodity-linked cycles. These differences create diverse opportunities for both directional and mean-reversion strategies.
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FAQ
What makes an index like the S&P 500 or DAX 40 'most traded'?
Indices such as the S&P 500, Dow Jones Industrial Average, DAX 40, FTSE 100 and Nasdaq-100 are considered the most traded because of their liquidity, transparency and global relevance. They represent some of the largest and most influential economies in the world – the United States, Germany and the United Kingdom – and encompass diverse sectors, from technology to finance and energy.
These indices attract substantial trading volumes from both institutional and retail participants, who use them to gauge market sentiment, benchmark portfolios, or speculate on price movements..
How are stock market indices calculated?
Every index follows a defined methodology published by its provider. Some, such as the S&P 500 and DAX 40, are market-capitalisation weighted, meaning larger companies have a greater impact on the index’s value. Others, like the Dow Jones Industrial Average, are price-weighted, so companies with higher share prices carry more influence, regardless of their market size.
The Nasdaq-100, meanwhile, applies a capped market-cap weighting to prevent a handful of large technology companies from dominating its performance. These methodologies are designed to maintain consistency and transparency, ensuring that each index remains a reliable representation of its respective market segment.
What factors influence major stock indices?
The movement of major stock indices is influenced by a mix of economic data, corporate results and geopolitical developments. Interest-rate decisions from central banks – such as the Federal Reserve, European Central Bank and Bank of England – often have a strong impact on investor sentiment. Lower rates tend to support equity valuations, while higher rates can reduce risk appetite.
Other key drivers include inflation readings, employment data, and quarterly earnings reports from leading index constituents. In 2025, indices have also responded to currency fluctuations, commodity prices, and advances in sectors such as artificial intelligence and renewable energy. Together, these factors shape the direction of global equity markets – whether they advance, consolidate, or retrace.
Can I trade CFDs on indices at Capital.com?
Yes. Capital.com offers contracts for difference (CFDs) on major global indices, including the S&P 500 (US 500), Dow Jones (Wall Street 30), Nasdaq-100 (US Tech 100), FTSE 100 (UK 100) and DAX 40 (Germany 40). CFD trading allows you to speculate on price movements in either direction – rising or falling – without owning the underlying asset. CFDs are traded on margin, and leverage amplifies both profits and losses.