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What is the Nasdaq and how does it drive the modern global economy?

More than an exchange or an index, the Nasdaq Stock Market® reflects companies leading earnings growth today and shaping the economy of tomorrow.

June 23, 2026 10 min read

When the Nasdaq Stock Market began trading on February 8, 1971, it upended centuries of market tradition.

Trading was once a physical act. Securities changed hands in coffee houses and curbside markets, where buyers and sellers met face to face to negotiate. That evolved into crowded trading floors and formal exchanges, where price discovery relied on shouts, hand signals, ticker tape, phones, and printed quotes.

For decades, this floor-based auction model defined modern finance. Information moved slowly. Enter Nasdaq.

Launched as the world’s first fully electronic exchange with no trading floor at all, the Nasdaq began as a structural shift in how markets operate. Since its founding, it’s gone on to become a central marketplace for many of today’s leading growth companies—shaping how investors define growth leadership and opportunity.

Why investors pay attention to the Nasdaq

Nasdaq is central to both market structure and equity leadership.

Because of how it’s constructed and what it represents, the Nasdaq plays a distinctive role in equity markets. It is not just a listing venue—it is a concentrated expression of where growth, capital, and innovation intersect. As a result, its composition and performance often signal broader shifts in leadership, sector dynamics, and investor positioning:

Nasdaq is home to many of the largest growth leaders

The Nasdaq is home to many of the largest publicly listed companies in the world by market capitalization. In fact, nine out of the ten largest companies by market capitalization are in the Nasdaq-100 Index®.¹ Investors often use the Nasdaq-100 Index®—Nasdaq’s flagship index of 100 of the largest non-financial companies listed on the Nasdaq Exchange—as a proxy for large-cap growth.

Figure 1: Top 10 companies within the Nasdaq-100 Index®

Name	Weight in portfolio (%)	Market cap ($B)
NVIDIA	8.54	$4,849,551
Alphabet	7.60	$4,646,437
Apple	7.01	$3,983,727
Microsoft	5.33	$3,029,167
Amazon	5.01	$2,851,279
Broadcom	3.48	$1,976,392
Tesla	3.35	$1,433,297
Meta	3.18	$1,553,287
Walmart	3.13	$1,051,613
Micron	2.83	$583,219
Average total market cap		$2,595,797

Source: Bloomberg Finance, L.P., as of April 30, 2026. Characteristics as of the date indicated. Alphabet includes both Class A and Class C stock combined to calculate the portfolio weight. References to specific company stocks should not be construed as recommendations or investment advice.

Sector exposure tilts toward growth-oriented industries

Both the Nasdaq-100 Index® and the Nasdaq Composite® Index have meaningful exposures to companies in growth-oriented sectors like Technology, Consumer Discretionary, and Health Care.² This emphasis has functioned as a structural growth tailwind by maintaining exposure to companies and sectors that have driven faster growth across market cycles.³

Many Nasdaq-listed companies are at the forefront of innovation in areas like AI, cloud computing, semiconductors, and healthcare. For investors, that means Nasdaq-linked exposure isn’t just broad equity exposure—it offers more direct access to the companies and industries driving long-term economic growth.

Many are companies that:

Reinvest heavily in future growth through R&D spend⁴
Accelerating the growth of intangible assets and novel patent applications⁵
Contribute disproportionately to high growth over the past decade⁶

As a result, Nasdaq exposure tends to reflect companies and sectors that are more closely aligned with long-term structural growth trends.

Performance reflects its growth bias

Growth-oriented companies have become more prominent in major equity indices as a smaller group of companies account for a large share of earnings growth, and many of those companies are listed on the Nasdaq. The performance of the Nasdaq-100® and Nasdaq Composite® relative to broader benchmarks reflects its growth bias and sector composition.

What is the Nasdaq?

The Nasdaq functions as a global marketplace where investors can buy and sell securities such as stocks and ETFs. Nasdaq, Inc. also maintains thousands of indices tracking various baskets of securities.

The Nasdaq Stock Market has long been a primary listing venue for growth companies’ initial public offerings (IPOs)⁷—like Apple, Intel, and Microsoft in the 1970s and 1980s—and it’s the world’s second-largest stock exchange by market cap.⁸

Figure 3: The Nasdaq Stock Market’s growth since inception

3,400+

Listed securities ⁹

$47.7T

In total market value ¹⁰

2,768

IPOs since 2015 ¹¹

73%

Win-rate of Nasdaq-eligible IPOs in 2026 ¹²

The Nasdaq Stock Market has three tiers:

The Nasdaq Global Select Market®, which has the most stringent listing requirements¹³
The Nasdaq Global Market®, which is less stringent than Global Select Market¹⁴
The Nasdaq Capital Market®, which is less stringent than Global Market¹⁵

Each tier has specific requirements for companies to list on the exchange. There are specific requirements companies must follow for financials, liquidity, and corporate governance at each tier.¹⁶

The Nasdaq connects buyers and sellers through a network of computers and market participants. Multiple market makers compete to provide bid and ask prices.

What does it mean when people say “The Nasdaq”?

When people say, “the Nasdaq,” they’re typically talking about one of these two main indices: the Nasdaq-100 Index® and/or the Nasdaq Composite® Index. Both are closely associated with Technology and growth-oriented companies, and together they shape how people think about the performance of the Nasdaq overall.

Key Nasdaq indices: The Nasdaq Composite® and the Nasdaq-100®

Nasdaq maintains a vast array of thousands of indices, but two are most prominent: the Nasdaq-100 Index® and the Nasdaq Composite® Index. The Nasdaq-100® is focused on non-financial large-cap leaders, and the Nasdaq Composite® captures the full breadth of the exchange. Both indices are market-cap weighted, but the Nasdaq-100® uses a modified market-cap weighting approach by excluding certain shares, capping low-float exposure, and applying strict company- and security-level weight caps to control concentration.¹⁷ The Nasdaq Composite® follows a traditional market-cap weighting with no such caps.

Nasdaq-100 Index®

The Nasdaq-100® is a focused index that tracks 100 of the largest non-financial companies listed on the Nasdaq, offering exposure to many of the market’s most established growth leaders. It is more heavily weighted toward sectors like Technology, Communication Services, and Health Care and tends to be dominated by large-cap names with global reach. As a result, the index is often viewed as a benchmark for growth, but with higher concentration risk tied to its largest holdings. For investors, it’s typically used as an allocation to capture long-term earnings growth and exposure to companies shaping major economic trends.

Nasdaq Composite® Index

By contrast, the Nasdaq Composite® provides a broader view of the exchange, tracking nearly all companies listed on Nasdaq—from large-cap leaders to smaller, earlier-stage firms. This broader composition spans a wider range of sectors and company sizes, including biotechnology, financials, and emerging growth businesses. While still growth-oriented relative to other major indices, the Composite is slightly more diversified than the Nasdaq-100®, making it a useful proxy for the overall Nasdaq market. It also includes Financials, whereas the Nasdaq-100® doesn’t. For investors, it offers a more comprehensive snapshot of the exchange, capturing both established leaders and the next wave of potential innovators.

Figure 4: Nasdaq-100® and Nasdaq Composite® industry breakdowns

	Nasdaq-100 Index®	Nasdaq Composite® Index
Technology	65.54%	64.90%
Consumer Discretionary	18.64%	17.60%
Telecommunications	3.87%	2.32%
Health Care	3.77%	4.70%
Industrials	2.97%	3.17%
Consumer Staples	2.17%	1.42%
Basic Materials	1.30%	0.97%
Utilities	1.18%	0.81%
Energy	0.55%	0.74%
Financials	0.00%	2.81%
Real Estate	0.00%	0.57%

Source: Nasdaq-100^® and Nasdaq Composite^® sector weightings, Nasdaq Global Indexes, as of May 18, 2026. Sector classifications are based on the Industry Classification Benchmark (ICB) methodology.

Why companies list on the Nasdaq

The Nasdaq attracts investors who are seeking exposure to growth-oriented, forward-looking industries. This positioning can help companies align their story with a growth-focused investor base.

Figure 5: 500 listing transfers to Nasdaq by the numbers

$4T

In total market value ¹⁸

Companies in the Nasdaq-100® ¹⁹

Countries ²⁰

Companies in the S&P 500 ²¹

Companies over $20B in market value ²²

Sectors ²³

Nasdaq’s fee structure and listing model can offer cost advantages relative to other exchanges, including lower ongoing listing costs and fewer incremental charges.²⁴ By listing on Nasdaq, companies have the opportunity join indices like the Nasdaq-100® and Nasdaq Composite® to attract new investors.

Company Callout: Walmart’s move to Nasdaq signals a growth tilt

The Nasdaq isn’t just high-flying tech stocks.

Walmart didn’t get its start by building computers, semiconductors, or robots. It began as a traditional brick-and-mortar retailer and moved its listing to the Nasdaq in December 2025 after more than 50 years on its prior exchange.²⁵ It began trading there on December 9, 2025.

Today, the company has expanded into eCommerce, digital services, and healthcare—reflecting a more technology-driven and growth-oriented business model. Its move underscores how Nasdaq has evolved beyond technology listings alone.

Why the Nasdaq was created: A brief history

The Nasdaq is both the world’s second largest exchange globally by listed market cap and the first electronic exchange,²⁶ but it didn’t start that way. It was created largely to solve for two critical issues: inefficiencies and lack of transparency in equity trading.

At the time, most trading took place on physical floors or through decentralized over-the-counter (OTC) markets where dealers negotiated prices by phone.²⁷ But by the time stock prices were printed in your local or national newspaper, they were stale. Quotes were often inconsistent, pricing information was fragmented, and investors had limited visibility into where securities were trading or at what price.

In 1963, the Securities and Exchange Commission (SEC) published a report known as the Special Study of the Securities Markets recommending the creation of a computerized substitute for printed stock quotes to improve transparency of stock prices and market efficiency.²⁸

Around that time, there were about 5,000 members of the National Association of Securities Dealers (NASD)—the regulator of OTC markets trading stocks by telephone and the pink sheets—and they were already operating in a “floor-less” virtual marketplace.²⁹ Thus, they were best equipped to address these problems.

NASD went on to spearhead the creation of the Nasdaq, which launched in 1971—shorthand for National Association of Securities Dealers Automated Quotations, the first electronic systems where market makers in OTC stocks could electronically update their bid/ask quotes.³⁰ NASD evolved into the Financial Industry Regulatory Authority, also known as FINRA today.³¹ The Nasdaq-100 Index® was then launched in 1985.

Figure 6: Nasdaq key milestones

1971
The Nasdaq's electronic exchange begins operating

1971
Intel lists on the Nasdaq

1980
Apple goes public on the Nasdaq³²

1980s
Nasdaqintroduces the Nasdaq Workstation, enabling brokers to advertise to and interact with each other³³

1984
Nasdaq begins offering electronic order execution³⁴

1985
The flagship Nasdaq-100 Index^® launches

1999
Nvidia goes public on the Nasdaq³⁵

2014
Nasdaq begins 38 consecutive quarters of IPO leadership in the US³⁶

2021
Nasdaq celebrates 50 years since its 1971 launch

Over time, Nasdaq evolved from a quotation system into a fully electronic exchange capable of executing trades, further modernizing financial markets. It became known for listing growth-oriented companies, especially during the late 20^th century as industries like computing and telecommunications expanded rapidly. Today, its legacy reflects the broader shift from manual, location-based trading to fast, technology-driven markets.

Where Nasdaq exposure fits in a portfolio

The Nasdaq is no longer just a proxy for growth investing—it has increasingly become a reflection of the evolving core of the equity market. As broader indices have become more concentrated with a relatively small group of companies driving earnings growth and index performance, the distinction between “growth” and “core” has blurred. Today, many of the companies that dominate global benchmarks are the same companies the Nasdaq provides exposure to: large, platform-driven businesses operating across multiple industries and shaping the global economy.

For investors, this shift reframes the role of Nasdaq exposure. Instead of a tactical tilt toward higher-risk growth, it can be viewed as a strategic allocation to the companies shaping the future of global markets—businesses that are often diversified across verticals, globally scaled, and deeply embedded in everyday economic activity. In that sense, Nasdaq-100® exposure may complement or even anchor a modern core equity allocation, offering a focused way to participate in the drivers of long-term market leadership.

Potential risks and benefits of Nasdaq exposure

Investing in a Nasdaq index can provide targeted exposure to some of the market’s most influential and fast-growing companies. But that growth orientation can introduce volatility. So while Nasdaq exposure has the potential to enhance returns, it often requires a higher tolerance for market swings.

Potential benefits of investing in the Nasdaq

Exposure to growth-oriented companies across technology, communication services, and consumer platforms
Strong long-term fundamental growth potential
Access to companies driving structural trends like AI, cloud, and digital services
Potential for outperformance in growth-led market environments

Potential risks of investing in the Nasdaq

Sensitivity to interest rates and shifts in investor sentiment toward growth
Sector concentration, particularly in technology and large-cap names
Greater potential drawdown risk during market corrections from rotations away from growth

The Nasdaq: From growth leadership to broader market influence

Nasdaq exposure can provide access to companies that have consistently driven long-term equity returns.

As market leadership—and equity core portfolios themselves—become more concentrated, Nasdaq-100® exposure can provide more targeted access to the companies driving earnings growth and long-term equity outcomes.

Where could Nasdaq exposure fit in a portfolio?

As market leadership becomes more concentrated, Nasdaq exposure may offer a way to align portfolios with the companies driving earnings growth.

Learn more

Frequently asked questions

What does Nasdaq stand for?

Nasdaq originally stood for the National Association of Securities Dealers Automated Quotations, reflecting its origins as an electronic system for publishing stock prices.

What’s the difference between Nasdaq Composite® and Nasdaq-100®?

How many companies are in the Nasdaq?

How are the Nasdaq-100® and Nasdaq Composite® indices calculated?

Glossary

Bid-ask spread, or spread
The difference between the highest price a buyer is willing to pay for an asset and the lowest price the seller will accept to sell. Bid-ask spreads are a key measure of the liquidity of an asset or security.

Diversification
A strategy of combining a broad mix of investments and asset class to potentially limit risk, although diversification does not guarantee protecting against a loss in falling markets.

Diversification benefits
In modern portfolio theory, diversification is an approach used to potentially reduce the overall risk of the portfolio by holding a mix of assets with low correlations to each other. The potential benefit of holding uncorrelated assets is that some investments may rise while others fall.

Earnings
The amount of profit that a company produces during a specific period, which is usually defined as a quarter (three calendar months) or a year. Earnings typically refer to after-tax net income.

Equities
An instrument that signifies an ownership position, or equity, in a corporation, and which represents a claim on its proportionate share in the corporation’s assets and profits.

Exchange traded fund (ETF)
An ETF is an open-ended fund that provides exposure to underlying investment, usually an index. Like an individual stock, an ETF trades on an exchange throughout the day.

Growth
In style investing, a strategy that focuses on companies that have the potential to grow their earnings at a high rate.

Market capitalization, or market cap
A measure of a company’s market value calculated by multiplying its share price by its total number of shares outstanding.

Market-cap weighting
An indexing methodology that weights companies in a benchmark from biggest to smallest using market capitalization as the method for measuring each company’s size or market value. Market capitalization is a measure of a company’s market value derived by multiplying the company’s share price by its total number of shares outstanding.

Nasdaq, or Nasdaq Composite® Index
A US equities index of more than 3,000 stocks focused largely but not exclusively on the technology and biotech sectors. Companies such as Apple, Google, Microsoft, Oracle, Amazon, and Intel all have their primary listings on the Nasdaq. The Nasdaq Composite® was created by the NASD in 1971 to enable investors to trade securities on a speedy computerized and transparent system. It became part of Nasdaq OMX Group in 2007.

Nasdaq, Inc.
The exchange company behind the Nasdaq Stock Market as well as eight exchanges located in Europe.

Nasdaq-100 Index®
A benchmark comprised of the 100 largest and most actively traded US companies listed on the Nasdaq. The index excludes firms in the financial sector, such as banks and investment companies.

Over-the-counter (OTC)
A term in financial markets used to describe transactions that occur away from any listed exchanges between individuals or involving dealer networks, whether in stock, bond, currency or derivatives markets.

Portfolio
A portfolio is a group of stocks, bonds, cash equivalents—a few or many—or a combination of various assets that are owned by an investor and/or managed by a professional.

Risk
The possibility that an investment’s return will differ from expected returns, especially the possibility of losing some or all of an investment. Risk is typically measured by calculating the standard deviation on historical, or average, returns of a given investment.

Russell 1000® Index
A benchmark that measures the performance of the large-cap segment of the US equity universe.

Russell 1000® Growth Index
A benchmark measuring performance of the portion of the large-cap segment of the US equity universe that exhibits strong growth characteristics.

Sector investing
An investor or portfolio that invests assets into one or more sector of the economy such as Financials, Energy, or Health Care.

Security
A financial instrument representing ownership positions in a publicly-traded stocks, corporation- and government-issued bonds, or rights to potential ownership as options represent. A security is a fungible, negotiable financial instrument that represents some type of financial value. The party that issues the security is called the issuer.

Spread
The difference between the yield on a given security and the yield on a reference security. The yield differences between, say, a corporate bond and a Treasury security with the same maturity would be expressed as the spread. Assets such as corporate bonds are thus sometimes referred to as “spread products.”

Volatility
The tendency of a market index or security to jump around in price. Volatility is typically expressed as the annualized standard deviation of returns. In modern portfolio theory, securities with higher volatility are generally seen as riskier due to higher potential losses.

Footnotes

¹ Bloomberg Finance, L.P., as of May 12, 2026, based on the Nasdaq-100 Index and publicly traded US firms on US exchanges using float adjusted market capitalization. Alphabet parent Google is treated as a singular company across both Alphabet share classes.
² Bloomberg Finance, L.P., as of April 30, 2026, using ICB Industry classifications.
³ FactSet, as of December 31, 2025. Data from December 31, 2015, through December 31, 2025. The Nasdaq-100 Index® has seen a higher annualized earnings per share growth (12.3%) compared to the S&P 500 (7.8%), Russell 1000 (7.9%) and Russell 1000 Growth (9.4%).
⁴ R&D is a key driver of innovation and economic growth, with empirical support showing that high R&D spending firms outperform over the long run. Source: Nasdaq, FactSet, Nasdaq AI Team, IPR Strategies, FierceWireless.com as of December 31, 2024. Index data as of each year-end from December 31, 2008, to December 31, 2023. Companies are ranked on prior full-year R&D expense as percent of sales on a 6-month lag (June 30) to allow for disclosure of reported financials. Baskets rebalanced annually 3^rd Friday of July.
⁵ Nasdaq, IPR Strategies via Nasdaq Data Link. Based on index constituents as of December 31, 2025. IPR Data as of December 31, 2025. Based on the Growth in Global Aggregate Value of Patents Among Publicly Listed Companies, 2007-2025.
⁶ Nasdaq, FactSet, Bloomberg. Industry index weights as of December 31, 2025. Sales growth data as of December 31, 2024. Nasdaq US Large Mid Cap Index (NQUSBLM) used as the benchmark for industry sales growth.
⁷ “Nasdaq-100® The Benchmark of the 21^st Century,” Nasdaq, as of June 30, 2025.
⁸ Nasdaq, as of May 31, 2026.
⁹ Nasdaq, as of May 31, 2026.
¹⁰ Nasdaq, as of May 31, 2026.
¹¹ Nasdaq, as of May 31, 2026.
¹² Nasdaq Initial Listing Guide, Nasdaq, January 2026.
¹³ Nasdaq Initial Listing Guide, Nasdaq, January 2026.
¹⁴ Nasdaq Initial Listing Guide, Nasdaq, January 2026.
¹⁵ Nasdaq Initial Listing Guide, Nasdaq, January 2026.
¹⁶ Nasdaq Initial Listing Guide, Nasdaq, January 2026.
¹⁷ Nasdaq-100® Index and Nasdaq Composite® Index Methodology, Nasdaq.
¹⁸ Nasdaq, May 31, 2026.
¹⁹ Nasdaq, May 31, 2026.
²⁰ Nasdaq, May 31, 2026.
²¹ Nasdaq, May 31, 2026.
²² Nasdaq, May 31, 2026.
²³ Nasdaq, May 31, 2026.
²⁴ Comparison of Nasdaq and NYSE listing fee schedules.
²⁵ Walmart Debuts on Nasdaq, Marking Its First Day of Trading, press release, December 9, 2025, Nasdaq.
²⁶ “Nasdaq-100® The Benchmark of the 21^st Century,” Nasdaq, as of June 30, 2025.
²⁷ “Transformation & Regulation: Equities Market Structure, 1934 to 2018,” Securities and Exchange Commission Historical Society.
²⁸ “Transformation & Regulation: Equities Market Structure, 1934 to 2018,” Securities and Exchange Commission Historical Society.
²⁹ “Transformation & Regulation: Equities Market Structure, 1934 to 2018,” Securities and Exchange Commission Historical Society.
³⁰ “Nasdaq: 50 Years of Market Innovation,” Nasdaq, February 11, 2021.
³¹ FINRA, Our History.
³² "Accessing Nasdaq’s Universe of Innovators," Nasdaq, October 2023.
³³ "Accessing Nasdaq’s Universe of Innovators," Nasdaq, October 2023.
³⁴ “Transformation & Regulation: Equities Market Structure, 1934 to 2018,” Securities and Exchange Commission Historical Society.
³⁵ "Accessing Nasdaq’s Universe of Innovators," Nasdaq, October 2023.
³⁶ "Accessing Nasdaq’s Universe of Innovators," Nasdaq, October 2023.
³⁷ Nasdaq Composite® Index Fact Sheet, as of March 31, 2026.

Disclosures

Important risk information

United States: State Street Investment Management, One Congress Street, Boston, MA 02114.

State Street Global Advisors (SSGA) is now State Street Investment Management. Please click here for more information.

Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.

Investing involves risk including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

The performance data quoted represents past performance. Past performance does not guarantee future results.

Funds managed with an index investment strategy attempt to track the performance of an unmanaged index of securities, regardless of the current or projected performance of the index or of the actual securities comprising the index. This differs from an actively managed fund, which typically seeks to outperform a benchmark index. As a result, the performance of a fund managed with an index investment strategy may be less favorable than if such fund employed an active strategy. While a fund managed with an index investment strategy seeks to track the performance of an index as closely as possible, the fund’s return may not match or achieve a high degree of correlation with the return of the index due to operating expenses, transaction costs, and cash flows.

Nasdaq-100® returns are unmanaged and do not reflect the deduction of any fees or expenses. Nasdaq-100® returns reflect all items of income, gain and loss and the reinvestment of dividends and other income as applicable.

The views expressed in this material are the views of State Street Investment Management through the period ended June 10, 2026, and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

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Diversification does not ensure a profit or guarantee against loss.

References to specific company stocks should not be construed as recommendations or investment advice.

The statements and opinions are subject to change at any time, based on market and other conditions.

The stocks mentioned are not necessarily holdings invested in by SSGA.

Nasdaq®, Nasdaq-100 Index®, NDX®, Nasdaq-100®, Nasdaq Composite®, and Nasdaq Stock Market® are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by State Street Global Advisors Trust Company. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

This communication is not intended to be an investment recommendation or investment advice and should not be relied upon as such.

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