Rocket Companies and Affirm Holdings could be among the next companies added to the S&P 500 Index as upcoming index changes create room for new members, according to analysts at Keefe, Bruyette & Woods:
The boutique investment bank said discretionary changes tied to the S&P 500's third-quarter rebalancing will be announced on Sept. 4 and take effect on Sept. 18:
Ahead of that, KBW expects nine merger-related changes across the S&P 1500, including one expected vacancy in the S&P 500 that could prompt the index committee to add a new company:
The S&P 1500 is comprised of the S&P 500, the S&P Midcap 400, and S&P Smallcap 600 indexes:
KBW said Rocket is now the sixth-largest company eligible for inclusion in the S&P 500 and the largest eligible financial stock:
KBW, which is part of Stifel Financial, gave Rocket a medium probability of joining the benchmark during the third-quarter rebalancing, and a medium- to high likelihood of being added over the next several quarters:
Affirm, a buy now, pay later financial technology company, also has a medium probability of being added to the S&P 500 during the upcoming rebalancing, according to KBW:
Inclusion in the benchmark typically boosts demand for shares as index-tracking funds are required to buy newly-added companies:
On June 22, Marvell Technology, a chipmaker that makes several different parts and products needed for the artificial intelligence infrastructure boom, joined the S&P 500:
Flex, a contract manufacturer for electronics, was also added to the index then:
