One number for many assets
A market index tracks the combined value of a group of assets. The S&P 500 follows 500 large US companies; the FTSE 100 follows 100 large UK-listed companies; the DAX follows 40 large German companies.
Indices are usually weighted — larger companies count for more — so a few big constituents can move the whole index.
Trading an index
An index itself cannot be bought. People gain exposure through funds that track it, futures, options or, with some brokers, CFDs — each with its own costs and risks.