The S&P 500 index is set to undergo its quarterly rebalancing, which could bring new stocks into the benchmark large-cap US stock index. Companies like Coinbase, Block, and Robinhood are among those that meet the criteria for potential entry. However, choosing these new entrants is not strictly based on science, but rather a combination of art and market conditions.
The S&P Dow Jones Indices will announce its decisions after Friday’s close, and it’s likely to include companies from various sectors. The announcement will also reveal which stocks will be leaving the index.
Historically, new entrants are typically selected based on factors such as market capitalization, sector performance, and overall market trends. While no clear criteria have been disclosed, analysts expect some prominent players in the crypto and fintech spaces to make their debut.
The quarterly rebalancing is a natural process that ensures the S&P 500 remains representative of the broader US stock market. However, the uncertainty surrounding new entrants can create excitement among investors, particularly those looking for fresh perspectives on established markets.
Source: https://www.marketwatch.com/story/the-next-s-p-500-shake-up-could-usher-in-coinbase-block-or-these-other-stocks-72556108