S&P 500 and major index funds drive the stock market up in September 2024

Graphic by Yunnie Ha

The S&P 500, or the Standard & Poor’s 500 Index is one of the major stocks that are present in the stock market. According to the Bloomberg Ticker SPX, an index used to track the performance of the market, in S&P Global, the S&P 500 is widely regarded as “the best single gauge of large-cap US equities.” The index fund is made up of the 500 leading companies in the market while covering around 80 percent of the available market capitalization. When analyzing the S&P 500’s charts over time, the data trend indicates when the market was on an upward or downward trend. This data trend allows the index to influence markets and determines the probability of decisions made by both companies and individuals. 

Investopedia, a finance and investing encyclopedia, defines the S&P 500 as “a market-capitalization-weighted index of 500 leading publicly traded companies in the US,” allowing for it to be regarded as “one of the best gauges of prominent American equities' performance and the stock market overall.” This allows people, regardless of experience, to be able to invest in S&P while relying on the steadiness of the company’s growth. Furthermore, it provides an accurate representation of the overall market conditions daily. Index funds specifically have the unique ability to dictate how the market flows, determining the overall health of the economy over periods. 

In September of 2024, the quarter closed with the S&P 500 hitting its all-time high. According to Investopedia, the S&P 500 had the ‘best start to a year this century,” finishing quarter three up 5.5 percent and up 21 percent this year. The continuous upward trajectory of this particular sector in the market has been attributed to the American market recovery from an ‘early September selloff,’ indicating that investors forecast a soft landing along with the Federal Reserve’s continuance on cutting interest rates. This creates an easy opportunity for potential investors to invest through the recognition of explicit upward and downfall of the market as a whole. 

Looking towards the future, it is clear that these major index funds are advantageous in breaking all-time high records, ultimately setting new bars to be broken. The major spike in the growth of these funds indicates that investors should put in their money when the time is right and be able to profit from this exponential growth. 

“The best investment strategy is to start early, and invest some money into the index on an ongoing basis,” Hossein Khatami, PhD, Hult International Business School Associate Professor of Finance and Accounting, said. “There is no right time in my view, as an average investor cannot beat the market through market timing.” Although there may be no right exact time for one to put their money into index funds, it is certain that waiting too long and not investing at all can elicit regretful notions of contrition. “The index will certainly appreciate over the long run though, which means a good investment strategy is indeed allocating some funds to the index on an ongoing basis if the risk can be tolerated for the investor,” Mr. Hossein said. Even though one may feel hesitant to take a risk in investing in index funds, it can all pay off in the end and it would all be worth it. 

All in all, the S&P 500 is an index fund that accurately showcases the health of the market as a whole and specifically of the top 500 companies on the market. It is clear that although there may be no exact time to invest in index funds, it will certainly pay off in the long run. The month of September has been good, particularly for the S&P 500 which has reached new all-time highs. This is just the beginning and is the start of the stock market driving up in value along with the increase in the S&P 500 and other major index funds.