Two NASDAQ Indexes. Most Investors Only Know One.
NASDAQ has two indexes and they measure very different things. The NASDAQ Composite covers all 3,000-plus companies listed on the exchange, including financial firms, small-cap startups, healthcare, and consumer goods. It is broad and more volatile. The NASDAQ 100 covers only the 100 largest non-financial companies on NASDAQ. It is tech-heavy, large-cap, and more stable.
At the time of writing, NASDAQ 100 stands at 29,069 points. NASDAQ Composite stands at 26,032. The gap between them reflects the weight of technology concentration. Inside the NASDAQ 100, technology stocks occupy approximately 60% of the index. The top 10 components alone account for 46.92% of the entire index weight.
One more fact most investors do not know: the NASDAQ trading hall is located at 151 West 42nd Street, Floors 26 to 28, New York. The Times Square billboard is just a showroom. Every IPO photo is taken there. It is not the exchange.
What 10 Years in the NASDAQ 100 Actually Returns
The NASDAQ 100 total return index has delivered 480.59% over 10 years, an annualised return of 19.23%. Over 5 years the cumulative return is 88.59%. Over 3 years, 84.30% cumulative at 22.61% annualised. Over the past year, 23.99%.
These numbers include the drawdown years. The 4-year annual return was -10.35% as a single year figure, reflecting 2022. The 5-year annualised is 13.53%, absorbing that year. The point is simple: staying in the index through the down years is what produces the 10-year number. Time in the market, not timing the market.
SpaceX Wants to Join the NASDAQ 100 Within 3 Months
SpaceX IPO launches on June 12 under ticker SPCX. The company’s stated requirement is to achieve inclusion in the NASDAQ 100 within 3 months of listing. This is not routine. Inclusion requires meeting size, liquidity, and listing criteria. The market capitalisation at IPO, combined with trading volume, will determine whether SPCX qualifies for the quarterly review.
If SPCX enters the NASDAQ 100, index funds and ETFs tracking that index must buy it automatically. That is forced institutional buying regardless of sentiment. It is one of the most powerful technical catalysts available to any new listing.
The market has no interest in G2, G3, G7, G20, or Hormuz. It is watching NVDA, AMZN, TSLA, and now SPCX. The financial market is a world of figures and alphabets.
Why the US Market Keeps Breaking Records
Three structural reasons explain why the US market breaks record highs continuously.
First, global capital concentrates in the US. In times of war or turmoil, no one attacks the US mainland. The market becomes a safe haven. In peacetime, it is the world’s most efficient capital accumulation engine. Money flows in from every direction.
Second, when NASDAQ rises, other sectors follow but move slower. When NASDAQ falls, traditional sectors fall faster. When the US market falls, Asian and European markets fall faster. The US leads on the way up and on the way down. Being in the US market, specifically in the NASDAQ 100, gives the best asymmetry.
Third, index rebalancing removes the losers. Every quarter, sluggish and falling stocks are kicked out. Only energetic, rising stocks remain in the components. You are not holding a static portfolio. You are holding a self-cleaning basket of the strongest companies in the world.
The Top 10 Rule
NVDA is 8.69% of the NASDAQ 100. AAPL is 7.64%. MSFT is 5.64%. AMZN is 4.59%. TSLA is 3.81%. META, WMT, GOOGL, GOOG, and AVGO complete the top 10. Together they are 46.92% of the entire index.
The market is effectively led by these 10 names. The NASDAQ 100 leads the US market. The US market leads the world. The chain of influence runs from 10 stocks to the entire global equity system. Picking stocks within the top 10 is safer than most alternatives. Buying the index itself removes the selection risk entirely.
What Investors Should Do Now
- NASDAQ 100 is the benchmark — 19.23% annualised over 10 years including drawdowns; if your portfolio is not beating QQQ consistently, buy QQQ instead of individual stocks
- Watch SPCX for NASDAQ 100 inclusion — if SpaceX qualifies for the quarterly review after June 12 IPO, forced index buying follows automatically; inclusion is the catalyst, not just the IPO price
- Fear and Greed at 59 and falling — down from 69 one month ago; the market is cooling gradually, not collapsing; watch the 10-SMA on S&P and NASDAQ for the real adjustment signal
- Iran talks need more time — Qatar confirmed through Pakistan-mediated channel; no deal imminent; oil remains elevated; mortgage rates at 6.56%, a seven-week high, adding pressure to rate-sensitive sectors
- Stay in the top 10 — NVDA, AAPL, MSFT, AMZN, TSLA, META, WMT, GOOGL, AVGO; these are the names that move the NASDAQ 100, which moves the US market, which moves the world
Key Takeaway: The NASDAQ 100 has returned 480% in 10 years at 19.23% annualised, 10 stocks control 47% of it, SpaceX wants inside within 3 months of its June 12 IPO, and the market does not care about G2, G3, or Hormuz: it cares about NVDA, AMZN, and SPCX.
Related reading: NVDA Analysis · AMZN Analysis · Various ETFs · Space Economy · Wave Theory and Average Lines
Read previous US Stock Express editions here.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.