Reddit set to enter the S&P 500 next week, shares jump 15%

Reddit is slated to become part of the S&P 500 on Aug. 18, according to a statement from S&P Dow Jones Indices, taking the place of AvalonBay Communities after that firm’s merger with Equity Residential. The inclusion will automatically route holdings from major index funds such as Vanguard’s and BlackRock’s S&P 500 ETFs, as well as mutual funds like Fidelity’s and Schwab’s, into Reddit’s stock. Trading opened on Friday with the shares climbing about 15% to $182.

Historical examples show that index-driven spikes can be short-lived; for instance, Workday’s price fell after an initial jump, while Tesla once saw a 60% surge. Reddit, which went public in March 2024, has turned profitable and expanded its ad partnerships with Google and OpenAI, meeting the profitability and market-cap criteria for S&P 500 eligibility.