Nasdaq to S&P 500 Ratio

Interpretation

What is the proportion of the Nasdaq to the overall US stock market? The ratio in the chart above divides the Nasdaq Composite Index by the S&P 500. When it rises, the Nasdaq outperforms the S&P 500 - and when it falls, the Nasdaq underperforms. By definition, this ratio cannot grow forever. At some point, the stocks listed on the Nasdaq Exchange would simply make up 100% of the US stock market.
The ratio peaked in the year 2000, during the Dot-com mania.

Data Sources

• Federal Reserve Bank of St. Louis: Recent S&P 500 prices
• Federal Reserve Bank of St. Louis: NASDAQ Composite Index
• Quandl: Historical S&P 500 prices

Further Information

• TradingView Chart: Nasdaq / S&P 500
• Investopedia: Standard & Poor's 500 Index - S&P 500
• Investopedia: Nasdaq Composite Index
• Longermtrends: US Stock Market Indices

Interpretation

The NASDAQ Composite tracks the performance of all common equities listed on the NASDAQ stock market exchange.
The S&P 500 consists of 500 large US companies and captures approximately 80% of available market capitalization. Therefore, it is quite representative of the overall US stock market and moves almost identically to the Wilshire 5000.
Both indices are capitalization-weighted and do not include dividends.