S&P 500 Shakeup Hours Away, Marvell and Reddit Lead Contenders

S&P Dow Jones Indices is set to announce the results of its quarterly S&P 500 rebalancing, with the changes taking effect prior to market open on Monday, June 23, 2026. MarketWatch analysis from June 5 identified Marvell Technology, Reddit, and a mortgage sector candidate as potential additions to the benchmark index. The reshuffle is driven by updated market capitalizations and liquidity requirements, forcing passive funds managing over $5 trillion in assets to adjust their holdings. An official announcement confirming the additions and deletions is expected after market close on Friday, June 20.

Context — [why this matters now]

Quarterly S&P 500 rebalances ensure the index accurately reflects the largest and most liquid US publicly traded companies. The last significant reshuffle occurred in December 2025, when three technology firms were added following a sector rotation. The current macro backdrop features the S&P 500 trading near all-time highs, with the 10-year Treasury yield hovering around 4.3%.

The trigger for this specific rebalance is the quarterly review of companies that now meet the strict market cap and liquidity thresholds. A stock must have an unadjusted market capitalization of at least $15.3 billion and meet specific volume and trading criteria. Companies often see their shares appreciate significantly in the months leading up to a potential inclusion, a phenomenon known as the "pre-announcement pop.

Eligibility also requires four consecutive quarters of positive earnings, a rule that filters out many recent IPOs and unprofitable growth stocks. The index committee also considers industry representation, sometimes selecting a company from an underweight sector even if another candidate has a slightly larger market cap. This process maintains the S&P 500's status as a barometer of the broad US economy.

Data — [what the numbers show]

Market capitalization is the primary quantitative filter for S&P 500 inclusion. As of June 5, 2026, Marvell Technology's market cap stood at approximately $78 billion, solidifying its position as a frontrunner. Reddit, with a market cap near $12 billion at its IPO, has since appreciated to around $17 billion, clearing the critical threshold.

Trading volume is another key metric. S&P requires a stock to have an annual dollar value traded to float-adjusted market cap ratio of at least 1.0. Both Marvell and Reddit have consistently exceeded this requirement, with average daily trading volumes topping $1.5 billion and $500 million, respectively, over the past six months. This ensures sufficient liquidity for massive index funds to establish positions without extreme market impact.

Metric	Marvell Technology (MRVL)	Reddit (RDDT)	S&P 500 Minimum Requirement
Market Cap	~$78B	~$17B	$15.3B
Avg. Daily Volume (3-month)	~$1.5B	~$500M	Liquidity Ratio > 1.0

The potential mortgage sector "dark horse," such as Rocket Companies (RKT), operates with a market cap near $28 billion. Its inclusion would increase the financial sector's weight, which currently comprises about 12.5% of the index versus the information technology sector's 30% weighting.

Analysis — [what it means for markets / sectors / tickers]

Inclusion in the S&P 500 triggers immediate buying demand from index-tracking funds like Vanguard's S&P 500 ETF (VOO) and BlackRock's iShares Core S&P 500 ETF (IVV). For a stock with a float-adjusted market cap of $20 billion, this can translate to over $1 billion in forced buying from passive vehicles alone. This demand typically creates a short-term price uplift around the effective date.

The major beneficiary sectors from this rebalance are technology and communication services, reflecting their continued market dominance. A counter-argument is that the "index effect" is often front-run by active managers, potentially pricing in the move before the official announcement. This can lead to a "sell the news" event after the rebalance is executed.

Positioning data shows hedge funds have been increasing long exposure to the top contenders in recent weeks, anticipating the pre-announcement drift. The greatest trading volume and price volatility for the added and deleted stocks will occur on the rebalancing date, June 23, as fund managers execute their trades to mirror the new index composition precisely.

Outlook — [what to watch next]

The primary immediate catalyst is the official announcement from S&P Dow Jones Indices after the closing bell on Friday, June 20. Market participants will scrutinize the press release for the exact list of additions and deletions. The following trading session, Monday, June 23, will see the actual reconstitution trades hit the market.

Key levels to watch are the stock prices of the added companies relative to their 50-day moving averages. A significant premium to this average by the effective date could indicate the index effect is mostly priced in. Conversely, a small premium might suggest further upside as passive funds buy.

The next significant market structure event will be the FTSE Russell reconstitution, which occurs one week later on June 27. This can create overlapping flows and amplify volatility for stocks being added to or deleted from both major benchmarks. The next S&P 500 rebalance is scheduled for September 2026.

Frequently Asked Questions

How much do stocks typically go up after being added to the S&P 500?

Historical analysis shows an average price increase of 3-5% in the five days surrounding the inclusion announcement. The effect has diminished over time due to increased pre-emptive trading by hedge funds and algorithmic strategies. The magnitude depends on the stock's float; companies with a smaller available float experience a larger price impact because the same amount of buying pressure represents a greater proportion of shares available.

What happens to stocks that get removed from the S&P 500?

Stocks deleted from the index typically experience significant selling pressure, often declining 5-10% around the announcement. This is due to forced selling from index funds that must divest their holdings. The negative impact can be more pronounced and longer-lasting than the positive impact on additions, as the deletion often coincides with fundamental business challenges that prompted the removal.

Do international stocks ever get added to the S&P 500?

No, the S&P 500 is exclusively for US-domiciled companies. A key eligibility requirement is that a company must be incorporated in the United States. Some well-known firms, like Bermuda-incorporated Accenture (ACN) or Ireland-incorporated Medtronic (MDT), are included because they were grandfathered in under older rules or through a specific exemption for companies with a primary listing and operations in the US.