Introduction to US stock market Top 2 major indices of US share market

Understanding the basis of the US stock market

In our daily life, we consume or use many US company products. For watching movies we are using the Netflix OTT platform. To purchase products online we use Amazon. In the case of smartphones, many people are using apple products such as iPhones, IPad, MacBooks, etc. On laptops, many people are using windows operating software. in the case of food and beverages, we use Coca-Cola, PepsiCo, etc.

If you start focusing on what you are using you can find many products from US companies. So here we are going learn the basis of the US stock market and the Comparison between the major stock exchanges in the US stock market.

What are the major stock markets in the USA?

In the US we can find the NYSE stock exchange and NASDAQ stock exchange. These are the major stock markets in the US.

NYSE:- New York Stock Exchange

NASDAQ:- National Association of Securities Dealers Automated Quotation System

What are the additional stock exchanges present in the US

1. Boston Stock Exchange (BSE)
2. CBOE Options Exchange (CBOE)
3. Chicago Board Of Trade (CBOT)
4. Chicago Mercantile Exchange(CME)
5. Chicago Stock Exchange
6. International Securities Exchange (ISE)
7. Miami Stock Exchange (MS4X)
8. National Stock Exchange (NSX)
9. Philadelphia Stock Exchange (PHLX)

Top 5 information about the US stock market

Timing of the US stock market

The US stock market starts at 9.30 AM and ends at 4.00 PM

Major indices of the US stock market

• DOW
• NASDAQ
• S&P 500
• Russell 2000

Circuit filter of the US stock Market

7 %, 13% 20% which means the market will close if the indices fall by 20%. These are the major circuit filter of the US stock market.

Fractional Investment

In US stock market allows fractional investment in shares you can buy  1/10 of tesla’s shares

Regulator of the US stock market

Securities and Exchange Commission (SEC)

Securities and Exchange Commission (SEC)

In the US stock markets are controlled by “The Securities and Exchange Commission” which is an independent federal government regulatory agency. Their responsibilities are protecting the investors and making sure the functioning of securities are in a fair way. And provide capital information and they will protect the investors from fraudulent activities and malpractices in the stock market

 

What is the difference between NYSE and NASDAQ Stock markets?

 

NYSE (New York Stock Exchange)

• It is one of the oldest stock exchanges in the world
• It was founded in the year 1792
• It has a huge market capitalization and the market capitalization is more than 24 Trillion dollar
• More than 2800+ Companies are listed in NYSE
• In this blue-chip Industrial companies are listed in NYSE
• It has a trading floor but the volume of the physical share is very tiny

NASDAQ (National Association of Securities Dealers Automated Quotation System)

• NASDAQ was founded in the year of 1971
• It is the first and largest electronically traded stock market in the world
• It is huge in market capitalization and the market capitalization is more than 20 Trillion dollar
• More than 3500+ companies are listed on NASDAQ
• More of the technology-based companies are listed on NASDAQ
• It does not have a trading floor

What are the major companies present in NYSE and NASDAQ stock markets?

Major Companies in NYSE

• Berkshire Hathaway.
• Alibaba group holding Ltd.
• Johnson & Johnson.
• JP Morgan Chase & Co.
• Exxon Mobil Corporation.
• Bank of America Corp.
• Wall mart stores inc.
• Wells Fargo & Co.
• Visa Inc.
• Procter & Gamble Co.
• AT & T Inc.
• Pfizer Inc.

These are the major traditional blue chip companies listed in the NYSE markets.

Major Companies in NASDAQ

• Apple.
• Amazon.
• Alphabet (Google).
• Tesla.
• Facebook.
• NVidia.
• PayPal.
• Netflix.
• Intel.
• Adobe.
• Zoom.

These are the major companies listed in the NASDAQ. In the US stock market, both markets contain different companies listed.

US stock market Indices

The US stock market has 3 major Indices.

1. DOW Jones industrial average (DJIA)
2. NASDAQ
3. S&P 500
4. Russell 2000 (which track all small-cap companies listed)

 

 

DOW Jones industrial average (DJIA)

It is also called “DJIA”, “DOW30”, ”The Dow Jones”, “The Dow”

These indices track 30 large blue chip companies listed on NYSE and NASDAQ. It works mainly based on the price Weighted index. That means the stock which has a higher price will get the higher weightage and the stock that has a lower price will get comparatively lower weightage.

 

NASDAQ

These indices track 2500 companies listed in NASDAQ. The name of the stock market and the name of the index are the same. NASDAQ tracks the companies headquartered outside the country also. The 2500 companies headquartered may or may not be in the US. It works mainly on market capitalization-weighted index.

S&P 500

These indices track the 500 largest US publically traded companies and the companies should be headquartered in the USA. This index works on a market capitalization-weighted index

Why should you invest in the US stock market (If you are a person from another country?)

• Diversification

You can invest money in your home country and the US also. These will help you diversify your investment strategy

• US Markets are outperformed

Most of the time you can see that US markets are outperformed compared to other stock markets. If you are investing in these you will get high returns.

• Invest in high-tech companies

You can invest in COMPANIES LIKE Apple, Amazon, Netflix, Google, Tesla, Intel, etc. These will help you to get huge returns in the future because these companies are the top players in their industry segment.

• Fractional investment

Some countries are not allowed fractional investment but in the US stock market u can buy stocks in a fractional way like you can buy a 1/10 of tesla stocks. This will help you to get the benefit of the stock even if you don’t have money to buy that stock