They do but you're missing some calculations needed to gain an understanding. Intro To Stock Index Weighting Methods notes in part:
Market cap is the most common weighting method used by an index.
Market cap or market capitalization is the standard way to measure the
size of the company. You might have heard of large, mid, or small cap
stocks? Large cap stocks carry a higher weighting in this index. And
most of the major indices, like the S&P 500, use the market cap
Stocks are weighted by the proportion of their market cap to the total
market cap of all the stocks in the index. As a stock’s price and
market cap rises, it gains a bigger weighting in the index. In turn
the opposite, lower stock price and market cap, pushes its weighting
down in the index.
Proponents argue that large companies have a bigger effect on the
economy and are more widely owned. So they should have a bigger
representation when measuring the performance of the market. Which is
It doesn’t make sense as an investment strategy. According to a market
cap weighted index, investors would buy more of a stock as its price
rises and sell the stock as the price falls. This is the exact
opposite of the buy low, sell high mentality investors should use.
Eventually, you would have more money in overpriced stocks and less in
underpriced stocks. Yet most index funds follow this weighting method.
Thus, there was likely a point in time where the S & P 500's initial sum was equated to a specific value though this is the part you may be missing here. Also, how do you handle when constituents change over time? For example, suppose in the S & P 500 that a $100,000,000 company is taken out and replaced with a $10,000,000,000 company that shouldn't suddenly make the index jump by a bunch of points because the underlying security was swapped or would you be cool with there being jumps when companies change or shares outstanding are rebalanced? Consider carefully how you answer that question.
In terms of histories, Dow Jones Industrial Average and S & P 500 Index would be covered on Wikipedia where from the latter link:
The "Composite Index", as the S&P 500 was first called when it
introduced its first stock index in 1923, began tracking a small
number of stocks. Three years later in 1926, the Composite Index
expanded to 90 stocks and then in 1957 it expanded to its current
500. Standard & Poor's, a company that doles out financial information and analysis, was founded in 1860 by Henry Varnum Poor. In
1941 Poor's Publishing (Henry Varnum Poor's original company) merged
with Standard Statistics (founded in 1906 as the Standard Statistics
Bureau) and therein assumed the name Standard and Poor's Corporation.
The S&P 500 index in its present form began on March 4, 1957.
Technology has allowed the index to be calculated and disseminated in
real time. The S&P 500 is widely used as a measure of the general
level of stock prices, as it includes both growth stocks and value
In September 1962, Ultronic Systems Corp. entered into an agreement
with Standard and Poor's. Under the terms of this agreement, Ultronics
computed the S&P 500 Stock Composite Index, the 425 Stock Industrial
Index, the 50 Stock Utility Index, and the 25 Stock Rail Index.
Throughout the market day these statistics were furnished to Standard
& Poor's. In addition, Ultronics also computed and reported the 94 S&P
There are also articles like Business Insider that have this graphic that may be interesting:
S & P changes over the years
The makeup of the S&P 500 is constantly changing notes in part:
"In most years 25 to 30 stocks in the S&P 500 are replaced," said
David Blitzer, S&P's Chairman of the Index Committee. And while there
are strict guidelines for what companies are added, the final decision
and timing of that decision depends on what's going through the heads
of a handful of people employed by Dow Jones.