Since they were introduced, The Dow and the S&P 500 have included companies selected from the large-cap segment of the U.S. stock market.
For each index, the final decision about which stocks to add is made by an S&P Dow Jones Indices committee: the Averages Committee in the case of The Dow and the U.S. Index Committee in the case of the S&P 500.
While stock selection for The Dow is not governed by a strict set of rules, the committee focuses on an eligible company’s reputation, its history of sustained growth, its interest to investors, and its sector representation of the broader market. Over the past 15 years, for example, a number of technology companies have been added, reflecting the growth of the sector within the U.S. equity market.
However, there are no utilities or transportation companies in The Dow, as they are tracked separately in the Dow Jones Utility Average and the Dow Jones Transportation Average.
The selection process for the S&P 500 is governed by quantitative criteria—including financial viability, public float, adequate liquidity, and company type—that determine whether a security is eligible for inclusion. The committee’s role is to choose among those eligible stocks, taking sector representation into account. Among the key requirements are that a company has a sizeable enough market capitalization to qualify as a large-cap stock. It also must have sufficient float, or percentage of shares available for public trading. You can view the current thresholds for both of these criteria in the S&P 500 factsheet.