If there is one number that the entire global financial system watches every trading day, it is the S&P 500. The index is quoted on every news channel, referenced in every retirement account statement, and used as a shorthand for “the market” in conversations from trading floors to kitchen tables. Yet despite its ubiquity, most investors misunderstand what the S&P 500 actually measures, what moves it on any given day, and why its day-to-day movements often have very little to do with the economy most people experience. Understanding the machinery under the index is one of the most valuable skills…
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