Broad by construction and narrow in behavior: everything listed on one exchange, which happens to be the exchange where technology listed.
The Nasdaq Composite has no selection committee and no eligibility judgement beyond one requirement: the security must be listed on the Nasdaq Stock Market. That is the whole rule. More than three thousand companies qualify.
Which makes the index a curious object. By construction it is one of the broadest benchmarks in existence. In behavior it is a technology index, because the exchange it measures became the venue where technology companies chose to list.
Nasdaq began in 1971 as something genuinely new: an electronic quotation system rather than a physical trading floor. Where the NYSE ran on specialists shouting on a floor in lower Manhattan, Nasdaq was a screen network showing dealer quotes. The Composite launched alongside it at a base value of 100.
That technological identity shaped who listed there. Younger, faster-growing, often unprofitable companies found Nasdaq's listing requirements more accommodating than the NYSE's, and the association hardened over decades into something self-reinforcing — technology companies listed on Nasdaq because technology companies listed on Nasdaq.
The dot-com period cemented the index in public memory. The Composite's rise through the late 1990s and its subsequent collapse remains the reference example for a sector-concentrated benchmark detaching from and then reconverging with underlying earnings.
These are different indexes and the distinction matters, because financial media use "the Nasdaq" for both.
Because both are cap weighted and the largest Nasdaq companies are enormous, the two indexes move closely together despite the vast difference in constituent count. The thousands of small companies in the Composite contribute almost nothing to its movement.
This produces the Composite's central irony: it is the broadest of the major US indexes by company count and one of the most concentrated by weight.
Treat it as a read on large-cap growth and technology sentiment rather than as a broad market gauge. When commentators contrast "the Nasdaq" with "the Dow" as though comparing tech against industrials, the comparison is roughly fair in effect — but only because of where weight sits, not because of what the index formally contains.
Not by rule, but effectively yes by weight. It contains every listed sector, and technology companies dominate the market value.
Usually the Nasdaq-100, not the Composite. When someone refers to trading "the Nasdaq", they generally mean the 100.
Many Nasdaq-listed companies also meet S&P 500 criteria, so the largest names appear in both. The indexes measure different populations that intersect heavily at the top.