What is the Nasdaq?
Updated on August 24, 2026 · by Alex
Nasdaq is two things at once: an American stock exchange where more than three thousand companies are listed, and a family of indices that track those companies. The most quoted one is the Nasdaq 100, which holds the hundred largest non-financial companies listed there.
The confusion is constant and worth clearing up first.
Nasdaq the exchange is an electronic market where more than
three thousand companies are listed. It launched in 1971 as the first market with
no trading floor: everything on screen. A stock being listed there is why its
ticker shows up as NASDAQ:NVDA.
Nasdaq the index is several. The Nasdaq 100 holds the hundred largest non-financial companies on that exchange, and it is the one quoted in the news and tracked by the best known ETFs. The Nasdaq Composite includes all three thousand plus, so it moves differently and is far less representative of what people think they are looking at.
Because it is the thermometer for technology. By history and by listing requirements, the Nasdaq exchange has always concentrated growth companies, and the index shows it: the Nasdaq 100 rises more than the S&P 500 in good years and falls more in bad ones. It is not “better” or “worse”: it is more volatile because its contents are.
That behaviour makes it a useful signal. When the Nasdaq falls much harder than the S&P on the same day, the market is not fleeing risk in general: it is repricing growth expectations, which is a different story.
Treating “Nasdaq” and “Nasdaq 100” as the same thing when comparing returns. They are different indices with different results, and the gap between them in a single year can run to several percentage points. If you are going to compare, check which one your source is using.
The other mistake is assuming everything tech is on the Nasdaq and nothing on the Nasdaq is anything else. Not so: there are technology companies listed on the New York Stock Exchange, and the Nasdaq 100 holds supermarket chains and beverage companies. The tech tilt is real, but it is a tilt, not a rule.
