what is the nasdaq composite index 
the nasdaq composite index is a market capitalization weighted index of more than 2 500 stocks listed on the nasdaq stock exchange it is a broad index that is heavily weighted toward the important technology sector the index is composed of both domestic and international companies the nasdaq composite index is a highly watched index and is a staple of financial markets reports understanding the nasdaq composite indexthe nasdaq composite index includes all equity securities listed on the nasdaq they include common stocks ordinary shares american depositary receipts adrs units of real estate investment trusts reits and publicly traded partnerships as well as tracking stocks stocks that aren t eligible for inclusion are the securities of closed end funds exchange traded funds etfs preferred shares rights warrants convertible debenture securities or other derivatives 3the nasdaq composite includes the stocks of companies headquartered in the u s international companies are also included in the index which is in contrast to the s p 500 index and the dow jones industrial average djia the two other most frequently cited market benchmarks the nasdaq composite index is one of the most widely watched indexes in the world and is often seen as a stand in for the technology sector due to its heavy weighting in tech companies nasdaq composite index methodologythe nasdaq composite index was launched on feb 5 1971 it uses a market capitalization weighting methodology the index s value is calculated by summing the market capitalization of its components based on the current price of the constituents this total is then adjusted by a constant index divisor 4 the index had a value of 100 when it was first established 5the index is constantly calculated throughout the trading day its value is disseminated once per second from 9 30 a m to 5 16 p m et the closing value of the index may change up until 5 15 p m et as a result of corrections to the last reported price for index components 6two versions of the nasdaq composite index are calculated the first is a price return index and the other is a total return index the total return index assumes the reinvestment of cash dividends distributed by companies included in the index 7the year the nasdaq composite index was launched it had an initial value of 100 changes in the share price as a result of corporate actions such as stock splits stock dividends or spinoffs are tallied on the action s ex date changes in total shares outstanding following conversions stock repurchases secondary offerings or acquisitions are usually reflected on the night before the action s effective date 8eligibility requirements for the index are reviewed throughout the year a security that does not meet the eligibility requirements can be removed at any time usually at its last sale price nasdaq composite index compositionas noted above the nasaq composite is made up of more than 2 500 different companies that trade on the nasdaq 9 the industry weighting of the nasdaq composite index based on the included stocks was as follows as of july 10 2023 2the 10 most heavily weighed securities in the nasdaq composite index as of march 31 2023 were nasdaq composite index market performancethe nasdaq composite index produced an annualized return of 14 66 over the 10 years through july 7 2023 10its 9 1 decline in q1 2022 was the nasdaq composite s worst since the 14 2 loss in q1 2020 as the covid 19 pandemic struck the nasdaq s 12 drop in april 2022 was its worst since the 17 4 decline in october 2008 at the height of the global financial crisis the nasdaq composite met the common definition for a bear market in mid march of 2022 by dropping more than 20 from its jan 3 2022 peak from there the index saw a strong relief rally that roughly halved its losses by the start of april then gave back all those gains over the next month because the nasdaq composite is dominated by the historically volatile technology sector index performance tends to be more volatile than that of the s p 500 or the dow industrials 