The S&P 500 index is made up of 500 of the largest publicly listed US companies, with market capitalizations of at least $6.1 billion. The index is calculated based on each company's float-adjusted market capitalization, which is the total value of a company's outstanding shares that are available for public trading. The S&P 500 index is widely considered to be a leading indicator of the overall health of the US stock market and economy.
The decision on adding new stocks to the S&P 500 index is made by the Index Committee, which meets every month to consider possible inclusions. The committee looks at a range of factors when deciding which companies to add to the index, including market capitalization, liquidity, and industry representation. Once a quarter, stocks are added or deleted from the index as rules change, companies grow or shrink, and merge. The ins and outs of companies' weights in the index can be quite subjective and adjustments to companies' weights in the index can be quite subjective.