Indexes first came into existence as a way for investors to measure the United States’ equity market.
In 1884 Charles Dow and Edward Jones created the Dow Jones Average (later the Dow Jones Transportation Average). The index tracked eleven stocks – nine railroad and two industrial companies, but when Dow and Jones realized that industrial companies were a better proxy for the United States speculative markets, they created a new index: the Dow Jones Industrial Average (DJIA).
The DJIA has since become one of the leading indicators for the broader US stock market. Since then, indexes have expanded to cover basically every segment of the investable universe, ranging from the entire global stock market to the most niche investment themes and geographies.