S&P 500 vs Nasdaq — 10 years side by side
S&P 500 and Nasdaq are both U.S. markets, yet the results split apart. Run both for 10 years under the same conditions and the difference shows up clearly.
When you start with U.S. stocks, the question "S&P 500 or Nasdaq" tends to show up at some point. Both are U.S. markets. Both trend upward over long horizons. They're easy to confuse. Run them once under the same conditions and the difference between the two becomes clear quickly.
What is the S&P 500
The S&P 500 is an index of 500 large U.S. companies. The largest by market cap, spread across sectors. In one line, it's the average score of America's 500 leading companies.
The flagship ETF is SPY. It's been around since 1993. The sector spread is even enough that no single industry yanks it around too much. If you think of it as a car, it's the one that handles winding roads steadily. The acceleration isn't explosive, but the balance is there.
What is the Nasdaq
The Nasdaq 100 is an index of the 100 largest non-financial companies on the Nasdaq exchange. More than half are tech. In one line, it's the average score of U.S. tech-heavy stocks.
The flagship ETF is QQQ. It's been around since 1999. With tech weight running high, it tends to climb faster when the market is strong and drop harder when the market is weak. As a car, it's the one built for the straightaway — heavy on the accelerator.
How to run them side by side
In the tool, you can compare the two under the same conditions in two passes.
- First run — SPY 100% alone.
Set the asset weight to SPY 100% and the period to 10 years. Lump sum or recurring contributions both work. You'll repeat the second pass with the same conditions, so pick a reference setup and stick with it.
- Second run — QQQ 100% under the same conditions.
Change only the asset to QQQ 100%, and keep the period, amount, and mode identical to the first run. The result cards let you compare the two equity curves directly.
- You can also use the benchmark option.
The tool has a benchmark comparison option. Pick either SPY or QQQ as the benchmark, and a comparison line appears next to your portfolio curve. Set your portfolio to SPY and the benchmark to QQQ, and you see how the two curves split inside one screen.
How CAGR and MDD differ
Of the six result cards, the two that most clearly capture the difference are CAGR and MDD.
- CAGR (compound annual growth rate) — one line for the average yearly growth across the period.
- MDD (maximum drawdown) — the deepest dip from a peak during the period, in percentage from the high.
Run the same 10-year window and you'll often see Nasdaq (QQQ) post the higher CAGR, with a deeper MDD to match. The S&P 500 (SPY) tends to land the other way — a slightly lower CAGR with a less severe MDD. Same market, different curve shapes.
The window you pick also moves the result. In a stretch like the 2010s where tech ran hard, QQQ pulls ahead by a wide margin. In choppier stretches, SPY's drawdown comes out shallower.
Which one is better
The natural follow-up question. There's no single answer. Which of the two fits you depends on how much volatility you can absorb.
- If you can hold through a -30% drop without flinching → the QQQ side, with its sharper acceleration, may fit.
- If -20% is closer to your limit → the SPY side moves at a pace that's easier to stay with.
- You don't have to commit fully to one. A mix like SPY 70% + QQQ 30% lands somewhere between the two profiles.
The most accurate way to decide is to run both under the same conditions and look at how deep the MDD goes — then check that against the drawdown range you can actually live with.
One thing worth keeping in mind
The results are simulations built from past market data. Real accounts include trading fees, taxes, and slippage (small differences in execution price), which aren't reflected here. Under the same conditions, the actual return can come out lower than the displayed value.
The bigger point is that past behavior doesn't promise future behavior. The 2010s tech-driven stretch isn't guaranteed to repeat over the next 10 years. As industry structure and rate conditions shift, the gap between the two indices shifts with them.
The point isn't to pick one of the two. It's to run them both side by side and see how differently the same market can behave depending on the index — and let that observation build your own feel.
- This information is not investment advice.
- Past performance does not guarantee future results.
- Backtest results are simulations and may differ from actual trading outcomes.
Kistack is an information service designed to help users review market data independently and form their own judgments. These backtests are historical simulations based on public market data and do not guarantee future investment returns. Past performance is not indicative of future results. Trading costs such as fees, taxes, and slippage are not reflected in simulations. Data is provided by Kistack; decisions are made by users.
This information is provided for educational and informational purposes only and does not constitute investment advice within the meaning of the Investment Advisers Act of 1940 (IAA) §206. Kistack is not a registered investment adviser and does not provide individualized buy or sell recommendations.
All performance figures shown are historical simulations. Disclosures regarding past performance and risk are presented in a manner intended to be fair, balanced, and not misleading, consistent with FINRA Communications Rule 2210. No statement on this site is intended to omit material facts or to mislead readers under SEC Rule 10b-5 of the Securities Exchange Act of 1934.