The Nasdaq Composite is the world’s most followed tech-heavy benchmark. It has outperformed the S&P 500 over the long run, but its higher returns come with greater volatility.
The Nasdaq Composite closed at 25,297.62 as of June 26, 2025. The index includes around 3,000 components, launched on February 5, 1971, with a 10-year average annual return of roughly 14%. More than 55% of the index’s weight is in technology stocks.
What Is the Nasdaq Composite?
- Covers over 3,000 Nasdaq-listed stocks — nearly all domestic and international common-type stocks exclusively listed on the Nasdaq Stock Market.
- Market-cap weighted, meaning each constituent’s weight is proportional to its market value.
- Inception date: February 5, 1971.
Performance & Returns
- 10-year average annual return: ~14%.
- Higher volatility than the S&P 500 due to tech concentration.
- Dividend yield: around 0.6%.
Comparison with Other Indices
- Vs S&P 500: more tech, higher growth, higher risk.
- Vs Dow Jones: fewer stocks, more growth-oriented.
- Vs Nasdaq-100: Composite includes small and mid-cap stocks, making it more diversified.
How to Invest
- Via ETFs: QQQ (Nasdaq-100), ONEQ (Composite).
- Index mutual funds from Vanguard and Fidelity.
- Not possible to buy the index directly; only through funds or derivatives.
| Current Value | 25,297.62 |
| Number of Components | About 3,000 |
| Inception Date | February 5, 1971 |
| Sector Weight – Technology | ~55% |
| 10-Year Average Annual Return | ~14% |
| Dividend Yield | ~0.6% |
What is a Nasdaq Composite?
The Nasdaq Composite is a stock market index that includes nearly all stocks listed on the Nasdaq Stock Market. Its ticker symbol is ^IXIC. Nasdaq, Inc. tracks all 3,000+ stocks listed on the exchange, making it one of the broadest measures of U.S. equity performance.
How the Nasdaq Composite is calculated
The index is market-capitalization-weighted. Each security’s weight comes from its price and total shares outstanding, updated daily, with the index disseminated once per second during trading hours. Eligible securities include common stocks, American depositary receipts (ADRs), limited partnership interests, ordinary shares, and shares of beneficial interest. Ineligible securities include closed-end funds, convertible debentures, exchange-traded funds, preferred stocks, rights, warrants, units, and other derivative securities.
Key characteristics of the Nasdaq Composite
The index includes companies from all 11 ICB industry groups, including Technology, Consumer Discretionary, Health Care, Financials, and Industrials. About 95% of constituents are U.S.-listed companies and roughly 5% are international.
Nasdaq Composite vs other indices
The Nasdaq Composite is one of the three most-followed U.S. stock market indices alongside the Dow Jones Industrial Average and the S&P 500. Fidelity identifies these three as the main U.S. stock market indices used as benchmarks.
“The Nasdaq Composite Index measures all Nasdaq domestic and international based common type stocks listed on The Nasdaq Stock Market.” — Nasdaq – Overview for COMP
Which is better, S&P 500 or Nasdaq?
Neither is inherently better. The S&P 500 is more diversified across sectors, while the Nasdaq Composite is more heavily weighted in technology and growth stocks.
Performance comparison
Between 2015 and 2025, the Nasdaq Composite delivered an average annualized return of about 15%, compared with about 14% for the S&P 500 over the same period. Over a longer time frame, the Nasdaq Composite gained over 823% versus 544% for the Russell 3000.
Risk and volatility comparison
The Nasdaq Composite is particularly sensitive to interest rate changes due to its tech focus. The top 10 holdings account for about 51% of total index weight, with Apple at roughly 12.7% and Microsoft around 11%. This concentration amplifies drawdowns during tech corrections.
Sector composition differences
The Nasdaq Composite’s sector exposure is around 55% technology, with consumer discretionary as the next largest sector and financials at about 4% of weight. The S&P 500’s technology weight is lower, with greater sector diversification.
“State Street Global Advisors characterizes the Nasdaq Composite as more diversified than the Nasdaq-100 because it includes smaller firms and financials, while still remaining more growth-oriented than broader benchmarks.” — State Street Global Advisors – What is the Nasdaq?
What is the 10 year average return for Nasdaq?
The 10-year average annual return of the Nasdaq Composite is approximately 14%. Past performance does not guarantee future results, and returns vary widely year to year.
Historical annual returns
From December 31, 2007 to June 28, 2024, the Nasdaq-100 total return was 1,012% versus 416% for the S&P 500, an annualized 15.7% vs 10.5%. Long-term compounding benefits of the Nasdaq Composite are significant but punctuated by sharp drawdowns.
How to interpret average returns
Average returns can mask year-to-year volatility. The Nasdaq Composite tends to outperform in bull markets but underperforms during value-stock rallies or rising interest rate environments.
“LongtermTrends describes the Nasdaq to S&P 500 ratio as a metric comparing performance of the technology-heavy Nasdaq Composite to the broader S&P 500, where a rising ratio indicates Nasdaq outperformance.” — LongtermTrends – Nasdaq vs S&P 500 ratio
Why is the US market falling?
Market declines can be triggered by rising interest rates, inflation concerns, or geopolitical events. The Nasdaq Composite is particularly sensitive to interest rate changes due to its tech focus. Short-term corrections are normal market behavior. No single cause can be definitively attributed without current data.
Recent market movements
Without access to real-time data, specific recent movements cannot be verified. However, broad market declines often correlate with macroeconomic shifts, including Federal Reserve policy changes or economic data releases.
Potential causes (interest rates, inflation, economic data)
Rising interest rates reduce the present value of future earnings for growth stocks, directly impacting Nasdaq Composite valuations. Inflation concerns can trigger sector rotation away from technology into value or commodity sectors.
Impact on the Nasdaq Composite
The Nasdaq Composite’s concentration in technology means it often experiences larger percentage declines during market selloffs compared to the S&P 500. During the 2022 rate hike cycle, the Nasdaq Composite entered bear market territory before the S&P 500.
Is a market crash coming?
Market crashes are unpredictable by nature. Valuation metrics like P/E ratios can signal overvaluation, but no reputable source can definitively answer whether a crash will occur.
Indicators of a potential market crash
Key indicators include elevated Shiller CAPE ratios, inverted yield curves, and declining corporate earnings. When the Nasdaq Composite’s P/E ratio exceeds historical averages, it signals higher risk.
Historical market crashes and recoveries
The Nasdaq Composite experienced a 78% peak-to-trough decline during the dot-com crash (2000-2002) but recovered to new highs by 2015. During the Global Financial Crisis (2007-2009), it fell 54% before recovering. The COVID crash (2020) saw a 30% decline followed by a rapid recovery to new highs within six months.
Current outlook from analysts
Analyst sentiment is mixed. Some point to high valuations in mega-cap tech as a risk factor, while others argue that strong earnings growth justifies current levels. The ratio of Nasdaq to S&P 500 performance can signal regime changes.
Nasdaq Composite vs S&P 500: Side-by-Side Comparison
The two indices share a common market-cap weighting method but differ significantly in composition and risk profile.
| Metric | Nasdaq Composite | S&P 500 |
|---|---|---|
| Number of Holdings | ~3,000 | ~500 |
| Inception Date | February 5, 1971 | March 4, 1957 |
| Weighting Method | Market-cap weighted | Market-cap weighted |
| Technology Sector Weight | ~55% | ~28% |
| 10-Year Avg Annual Return | ~14% | ~13% |
| Dividend Yield | ~0.6% | ~1.5% |
| Top 10 Holdings Weight | ~51% | ~30% |
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For a deeper look at the index’s behavior, the Nasdaq Composite performance guide provides additional context on its historical returns and comparisons.
Frequently Asked Questions
What is the ticker symbol for the Nasdaq Composite?
The ticker symbol for the Nasdaq Composite is ^IXIC.
How often is the Nasdaq Composite rebalanced?
The Nasdaq Composite is reconstituted on an ongoing basis as securities are listed or delisted, with weights derived daily from each security’s price and total shares outstanding.
What is the difference between the Nasdaq Composite and the Nasdaq 100?
The Nasdaq Composite includes all Nasdaq-listed stocks, including small-caps, financials, and international companies. The Nasdaq-100 tracks roughly 100 large non-financial stocks listed on Nasdaq, making it more concentrated in mega-cap growth companies.
Can I buy shares of the Nasdaq Composite directly?
You cannot buy the index directly. You can invest via ETFs like ONEQ (tracks the Composite) or QQQ (tracks the Nasdaq-100), or through index mutual funds from Vanguard and Fidelity.
Why does the Nasdaq Composite have higher volatility?
Its heavy concentration in technology stocks, which are more sensitive to interest rate changes and economic cycles, drives higher volatility. The index’s top 10 holdings account for over half of its weight, amplifying price swings.
What is the all-time high of the Nasdaq Composite?
As of the latest available data (June 26, 2025), the Nasdaq Composite closed at 25,297.62. Its all-time high may differ depending on subsequent market movements.
How do I calculate the value of the Nasdaq Composite?
The index value is calculated by dividing the total market capitalization of all constituents by the index divisor, which adjusts for corporate actions. Nasdaq disseminates the value once per second during trading hours.