Explore the U.S. Stock Market: A Detailed Guide to Major Indices and Leading Stocks

If you are interested in investment opportunities in the U.S. stock market, you will certainly encounter familiar names such as the Dow Jones Index, S&P 500, Nasdaq Composite, along with major stocks like Microsoft, Tesla, Apple, Google, Amazon, or Disney. This article will help you better understand the structure, operation, and potential opportunities that this largest market in the world offers.

U.S. Stock Market: The Global Financial Hub

The U.S. stock market accounts for about 75% of the global market capitalization, affirming its position as the largest financial center in the world. The two main exchanges operating this market are the New York Stock Exchange (NYSE) and the Nasdaq Stock Market, which facilitate the buying and selling of shares of thousands of large companies.

According to statistics from Intercontinental Exchange, the total market capitalization of the U.S. stock market on September 30, 2022, reached $46.5 trillion, with NYSE alone holding a value of $30.1 trillion. This figure reflects the enormity and attractiveness of one of the largest exchanges on the planet.

Due to the diverse number of listed companies, these exchanges have created indices to help investors, fund managers, and analysts monitor market performance. The S&P 500 index, for example, measures the value of the 500 largest companies, while the Nasdaq 100 evaluates the top 100 companies on the Nasdaq.

Impressive Performance Over the Past 5 Years

The U.S. stock market has shown remarkable growth figures:

• S&P 500 Index: up 85.78%
• Dow Jones (DJI): up 54.13%
• Nasdaq 100 (NDX): up 147.43%

In individual stocks, notable technology companies have experienced:

• Microsoft (MSFT): up 256.33%
• Apple (AAPL): up 261.33%
• NVIDIA (NVDA): up 1908.58%

How to Profit from the U.S. Stock Market

To participate in this market, investors need a legitimate trading account according to U.S. stock exchange regulations. However, for Vietnamese investors, directly owning U.S. stocks faces many legal restrictions.

A popular alternative is margin trading (Margin Trading) using derivatives such as Contracts for Difference (CFD). Through this method, investors can:

• Profit from price differences without owning the actual stocks
• Take advantage of market movements to profit from both upward and downward trends (increase and decrease)
• Access the market with more flexible capital investment

Four Major U.S. Stock Indices

Out of approximately 5,000 indices operating in the U.S., the four most widely followed are the S&P 500, Dow Jones, Nasdaq Composite, and Nasdaq 100. Each has its own characteristics:

Dow Jones Index (DJIA)

Created in 1896 by Charles Dow, this index represents about 25% of the total value of the U.S. stock market. As of (27/3/2024): 39,411 points, with a market cap of $39.28 billion. It is one of the most closely watched indices, sensitive to geopolitical, economic, and pandemic events.

S&P 500 Index

Developed on 04/03/1957, the S&P 500 accounts for about 70% of the U.S. stock market value ($43.9 trillion as of 27/3/2024). The index value: 5,220 points. This index is considered one of the best global benchmarks for large-cap stocks because it includes leading companies from each sector.

However, it is noteworthy that 50% of the index’s value is determined by the market capitalization of the 45 largest companies, so it tends to reflect the volatility of a relatively small group.

Nasdaq Composite

Founded in 1971 by NASD, Nasdaq Composite is the third-largest stock exchange in the world after NYSE and Tokyo Stock Exchange ($35.48 billion, with a value of 18,210 points). This index includes companies from small to large, with many startups with small market caps, often reflecting activity in the technology sector and investor attitudes toward high-risk stocks.

Nasdaq 100

Established in 1985 and part of the Nasdaq indices, NAS100 focuses on the 100 largest companies. Value: 18,269 points, market cap $18.24 billion. As a non-financial index, it better evaluates sectors such as Technology, Telecommunications, Biotech, Media, and Services.

Notable Stocks in 2024

Besides indices, many individual stocks have also shown outstanding performance:

These stocks have demonstrated exceptional growth potential, especially amid overall market challenges.

Recent Trends in Indices

Dow Jones: From Sharp Correction to Recovery

The Dow Jones index experienced a sharp correction from a peak of 36,799 (4/1/2022) down to 28,690 (30/9/2022) - a 28.3% decline due to economic slowdown and energy crises. However, in the first three months of 2024, this index recovered 5.59% as the Fed signaled potential rate cuts.

S&P 500: Continuous Growth

Similar to Dow Jones, the S&P 500 was affected by global economic slowdown, but the decline slowed from October 2023. The index increased nearly 10% in the first three months of 2024 and continues to be one of the most closely monitored indices.

Nasdaq Composite: Positive Turnaround

Nasdaq Composite moved similarly to the S&P 500, quickly rebounding from its lows. The decline slowed and started to turn upward, with a 2.28% increase in March 2024.

Nasdaq 100: Strong Recovery

Despite being affected by global factors like other indices, NAS100 showed significant recovery. Starting from October 2023, it broke above 16,000, reaching 18,000 in March 2024. As of 01/04/2024, NAS100 has increased by 24.17% over the past 6 months.

Factors Influencing Future Market Trends

Federal Reserve Monetary Policy

Investors currently expect the Fed to cut interest rates in 2024 and 2025. According to Goldman Sachs forecasts, the Fed may implement 3 rate cuts in 2024, 4 in 2025, and 1 in 2026, bringing long-term rates to 3.25-3.5%.

Geopolitical Events

The Russia-Ukraine war and Israel-Hamas conflict are expected to continue impacting financial markets. Traders may prioritize safe assets like gold, slowing stock market gains. According to investor David Bahnsen, the stock market could decline 7-10% if Middle East conflicts escalate.

Overall Outlook

The U.S. stock market is experiencing a promising transition with many positive signals. Despite facing challenges such as geopolitical volatility and monetary policy changes, investment opportunities remain abundant. Mastering key indices, understanding market structure, and monitoring macro factors are key to making informed investment decisions in the U.S. stock market today.