Vertiv and EchoStar lead the technology stocks in the S&P 500 index component adjustment

Investing.com - S&P Dow Jones Indices announced a major overhaul of its benchmark indices on Friday, with several technology and industrial companies being added to the prestigious S&P 500 index. Following the announcement, Vertiv Holdings Co (NYSE: VRT) stock surged 5.6% in after-hours trading, while EchoStar Corporation (NASDAQ: SATS) and Lumentum Holdings Inc (NASDAQ: LITE) also saw significant gains.

Upgrade to InvestingPro to evaluate which index fund to invest in -** Enjoy 50% off today**

This quarterly adjustment aims to maintain the integrity of the most closely watched market indices. S&P Dow Jones Indices stated, “These changes ensure that each index better represents market capitalization across large-cap, mid-cap, and small-cap segments.”

Vertiv, Lumentum, Coherent Inc (NYSE: COHR), and EchoStar will officially join the S&P 500 before the market opens on Monday, March 23. To make room for these new members, the index will remove Match Group Inc (NASDAQ: MTCH), Molina Healthcare Inc (NYSE: MOH), Lamb Weston Holdings Inc (NYSE: LW), and Paycom (NYSE: PAYC).

At a higher level, the S&P 100 index will see significant additions of semiconductor and industrial giants, including Micron Technology Inc (NASDAQ: MU) and GE Vernova LLC (NYSE: GEV). These adjustments will come at the expense of established financial companies, with PayPal Holdings Inc (NASDAQ: PYPL) and American International Group Inc (NYSE: AIG) exiting this blue-chip club of 100 members.

Investors expect these changes to trigger billions of dollars in passive fund flows, as institutional managers rebalance their portfolios based on the new benchmarks. The effective dates will be spread over the next two weeks, starting with the SmallCap 600 index adjustment on March 13.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.