Top Holdings in S&P 500 Index as of May 2025 Ranked by Weight
Savvy Guide to the S&P 500: The Powerhouse of U.S. Stocks
One of the benchmark indices for determining the health of the U.S. stock market, the Standard & Poor's 500 Index (S&P 500) tracks 500 of the largest, most significant U.S. companies based on their market caps.
Insight: The S&P 500 is a hugely influential index, providing a barometer for the overall performance of the U.S. economy.
The companies on this prestigious index are carefully hand-picked, with stringent requirements regarding the company's structure, financial stability, and liquidity. Here's a snapshot of the key factors and selection criteria:
Basic Eligibility- Location: Must be headquartered in the U.S. and listed on a major U.S. exchange like the NYSE or Nasdaq.- Corporation: Must operate as a corporation with publicly traded common stock.
Financial Requirements- Market capitalization: A hefty market cap of at least $20.5 billion.- Profitability: Must report positive earnings in the most recent quarter, as well as maintain profits over the consecutive last four quarters.
Liquidity and Trading- Liquidity: Must have adequate trading volume and an appropriate float (the number of shares available for public trading).- Experience: Generally required to have at least one year of public trading history.
Quarterly reviews and updates keep the index up-to-date, with newly eligible companies added and underperforming ones removed. The index committee takes into account market representation, sector balance, and financial viability, beyond the quantitative metrics during the selections.
Insight: DoorDash and TKO Group made their debut on the S&P 500 in 2025, while BorgWarner and Celanese were delisted.
As of April 27, 2025, the S&P 500 saw a 6.3% dip since the start of the year due to economic uncertainties brought about by Donald Trump's tariffs, potentially leading to a possible recession.[1] Nevertheless, the Federal Reserve Board Chair, Jerome Powell, announced that the Fed would wait for clearer indicators before making any interest rate adjustments.[1]
The current breakdown of sectors within the S&P 500 demonstrates the dominance of information technology, financials, healthcare, and consumer discretionary sectors, with a combined weightage of 66.74%. On the other hand, the least-weighted sectors include energy, utilities, and real estate, with only a paltry 8.64% combined weightage.[2]
The S&P 500's top 25 components, which carry significant influence on index performance and the economy overall, includes the largest and most prominent companies, such as Apple, Microsoft, and Nvidia, among others.[2]
Insight: The current outperformance of the technology sector underscores the impact of declining inflation, strong margins, and robust cash flow on the overall index performance.
Investing in the S&P 500 offers excellent diversification across various sectors and industries, potentially leading to long-term growth. However, it's important to note that this diversification comes at a price, as the index is highly concentrated in the top-performing stocks, leading to increased volatility.
To capitalize on the S&P 500, you can purchase Exchange-Traded Funds (ETFs) or index funds that track the index, such as the SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO). For those looking for more complex strategies, options and futures are available, but they’re only recommended for those wishing to speculate on the index's future value.
Insight: The S&P 500 Equal Weight Index, which assigns an equal weight to every component regardless of market capitalization, provides an intriguing alternative for investors seeking to balance the concentrated nature of the traditional index.
The S&P 500 may be a tailored index that weighs companies based on their market caps, but it's undeniably one of the most powerful tools for gauging the health of the U.S. stock market and the broader economy.[3]
Disclaimer: The information provided on this site is for educational and informational purposes only and should not be considered as professional financial advice. The author does not own any of the securities mentioned in this article.
Sources:
- CNBC. (2025). Federal Reserve says it will “wait for greater clarity” before acting on interest rates. [online] Available at: https://www.cnbc.com/2025/04/16/fed-jerome-powell-to-wait-for-greater-clarity-before-making-any-rate-hike.html
- S&P Dow Jones Indices. (2025). S&P 500 Fact Sheet — April 2025. [online] Available at: https://us.spindices.com/documents/equity/equity-factsheets/sp-500-us-factsheet.pdf
- Barron’s. (2025). How the S&P 500 Works: The Full Guide. [online] Available at: https://www.barrons.com/articles/how-the-sp-500-works-the-full-guide-51570631807
- Investopedia. (n.d.). Standard & Poor's 500 Reconstitution. [online] Available at: https://www.investopedia.com/terms/S/sandp500_reconstitution.asp
- S&P Dow Jones Indices. (2025). S&P 500 Inclusion Criteria. [online] Available at: https://us.spindices.com/equity-indices/sp-500/sp-500-inclusion-criteria
- Wall Street Journal. (2025). Inside the Secretive Group That Controls the Stock Market. [online] Available at: https://www.wsj.com/articles/inside-the-secretive-group-that-controls-the-stock-market-11596749351
- The large, significant U.S. companies included in the S&P 500 are carefully chosen, prioritizing companies with a considerable market cap and positive earnings, as well as those that meet liquidity and trading requirements for adequate public trading.
- doorDash and TKO Group made their debut on the S&P 500 in 2025, while BorgWarner and Celanese were delisted due to underperformance.
- The S&P 500 saw a 6.3% dip since the start of the year as a result of economic uncertainties brought about by Donald Trump's tariffs, leading to potential worries of a recession.
- The Federal Reserve Board Chair, Jerome Powell, announced that the Fed would wait for clearer indicators before making any interest rate adjustments.
- The technology sector currently outperforms in the S&P 500, with strong margins, declining inflation, and robust cash flow impacting the overall index performance.
- To capitalize on the S&P 500, investors can purchase Exchange-Traded Funds (ETFs) or index funds, such as the SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO). As an intriguing alternative, the S&P 500 Equal Weight Index, which assigns an equal weight to every component regardless of market capitalization, is available for those seeking to balance the concentrated nature of the traditional index.
