You are thinking about this wrong. The S&P 500 is a capitalization weighted index meaning the larger the market cap the larger the weight. If you constructed a

You are thinking about this wrong. The S&P 500 is a capitalization weighted index meaning the larger the market cap the larger the weight. If you constructed a total market index using the same capitalization based weighting scheme, you'd find the S&P 500 would account for about 80% of the index value. In that light it is actually pretty close to "the entire market."