The S&P 500: a dominant force in global markets
As of the end of 2023, companies listed in the United States accounted for a staggering 59% of the global stock market’s total value. A significant portion of this value—51%—resides within the S&P 500, an index comprising the 500 largest publicly traded companies in the US.
The S&P 500 is home to some of the most influential companies in the world, often referred to as the “Magnificent Seven”. These include tech giants such as Apple, Microsoft, Alphabet (Google’s parent company), Amazon, Nvidia, and Meta (formerly Facebook). Together, these companies represent nearly all of the world’s trillion-dollar corporations, a testament to the unparalleled scale and influence of US markets.
A broader global perspective
While US markets dominate, they are not the entire story. Beyond the borders of the US, developed markets account for 30% of the global stock market value. These markets, characterised by well-established financial systems and high-income economies, include countries like Japan, the UK, Canada, France, and Switzerland. These nations collectively represent the second-largest slice of global market capitalisation, demonstrating the strength and stability of their economies.
The role of emerging markets
The remaining share of global stock market value is split between emerging markets, including China, which is often considered separately due to its outsized role in the global economy. Emerging markets are characterised by rapid economic growth, industrialisation, and, at times, heightened volatility. According to S&P, the largest emerging market economies by capitalisation include China, India, Taiwan, Brazil, and Saudi Arabia.
Among the standout companies in these regions are Saudi Aramco, the energy giant, and Taiwan Semiconductor Manufacturing Company (TSMC), a leader in advanced chip manufacturing. These companies not only define their respective markets but also play critical roles in global supply chains and economic trends.
A snapshot of global market dynamics
The distribution of global stock market value highlights the significant weight of US companies, particularly those within the S&P 500. However, it also underscores the importance of looking beyond US markets to capture the growth potential in developed and emerging economies. As the global economy evolves, investors and market watchers alike must pay attention to the shifting balance of power among these regions.
By examining these dynamics, we gain a better understanding of how different markets contribute to the global financial landscape—and the opportunities and risks that come with them.
