An index is a measurement standard that can be applied to the entire market or to a specific sector of that market. Indexes can also be applied to individual companies. A group of individual equities is what constitutes an index.

An index is a statistical measure that tracks the performance of a group of assets, such as stocks, bonds, or currencies, representing a specific market or sector. In finance, stock market indices like the S&P 500, Dow Jones, or NASDAQ provide a snapshot of market trends by aggregating the prices of selected companies. Indices help investors gauge market sentiment, compare performance, and make informed decisions. They can be price-weighted (based on stock prices) or market-cap-weighted (based on company size). Traders also use indices as benchmarks for portfolios or to trade derivatives like index futures, ETFs, and CFDs. In forex, indices like the USD Index (DXY) measure currency strength against a basket of other currencies, aiding in macroeconomic analysis and trading strategies.