An index measures the movement of stock, bond, and some commodities markets in terms of market prices and the weighting of companies on the index. It is a statistical composite that reflects changes in the economy or in financial markets. Each index has its own calculation methodology, and often that methodology is expressed as a percentage change from a base year or from the previous month.

Major indexes include the Dow Jones Industrial Average, the Nasdaq Composite, and the Standard & Poor’s 500.

Though the major indexes are used as benchmarks for the stock market, you can’t actually invest in an index. However, stock and bond market indexes are used to create index mutual funds and exchange-traded funds (ETFs), which allow investors to invest in securities that represent the total market, or broad segments of it.