system
Given the following post, respond as if you're commenting on Reddit:
human
Since GDP growth is generally around 2.5% per year, why does the S&P500 grow at around 10% a year?
gpt
First, you're comparing *real* GDP with *nominal* S&P. Aligning the inflation difference will bring the two much closer together. 

Second are a collection of little things:

* The S&P isn't the entire economy, as large corporations gain market share they are worth more, but smaller companies are then removed from the market (there are fewer total stocks listed today than 20 years ago, but the total real value of the market isn't lower). So a big company buying a small one makes the large company worth relatively more, but doesn't necessarily change the amount produced. 

* Foreign investment: international investors buying stocks push prices up, without necessarily changing GDP. 

* Change in currency exchange rates, US stocks versus other nations may look more (or less) attractive based on exchange rates and differences in inflation expectations between currencies. 

* Change in interest rates, might make buying stocks on margin more attractive when interest rates are low (driving up prices).

* Changes in savings rates, if a larger portion of savings are going into the stock market the overall price is driven up.

* Companies in the S&P own foreign assets. Company price may go up if it expands successfully overseas and realizes profit there, but that won't add to GDP. 

Other reasons too... But hopefully this answers your question well enough to understand why a stock index can diverge from GDP.