Investors use stock market indexes to gauge the health of an economy. Indexes are compiled from companies across different industries. By comparing these data, investors can calculate market performance by comparing current price levels with past prices.

Certain indices focus on a smaller subset of the market. The Nasdaq index, for example, closely tracks the technology sector. If you want to know how technology companies are performing, you should check the Nasdaq stock index.

Stock market index is a measure of stock prices that aims to represent the performance of the overall stock market. It is computed as a sum or average of selected stocks and can be used as a measurement for investment activity.