S&P 500 Index Excludes SpaceX from Inclusion, Creating Divergence with Nasdaq and Russell Indexes
The S&P 500 index committee decided to maintain its standard 12-month waiting period before adding SpaceX to the index, meaning S&P 500 fund investors won't gain exposure until mid-2027. The decision contrasts with Nasdaq and Russell indexes, which updated their rules to potentially include mega-cap IPOs faster. This creates potential performance divergence between major U.S. benchmarks and sets a precedent for how other mega-cap IPOs like OpenAI and Anthropic will be treated.
The S&P 500 index committee declined to accelerate its standard 12-month waiting period for SpaceX's inclusion in the index, meaning investors in popular S&P 500 ETFs like VOO, IVV, and SPY will not gain exposure to the stock until mid-2027. The decision is notable because SpaceX is launching with a $1.77 trillion valuation—the largest IPO in history—yet the S&P 500 maintained its rules while Nasdaq and Russell indexes signaled they would update theirs to accommodate mega-cap debuts. Index experts are divided on the decision: some argue the S&P 500 should have followed the precedent set by global benchmarks like FTSE and MSCI, which fast-tracked Saudi Aramco's inclusion in 2019 after 5-10 days. Others note that SpaceX's unprofitability and recent $4.28 billion quarterly loss trigger the S&P 500's profitability test, which could further delay inclusion. The divergence could create an "index war" with performance gaps between the S&P 500 and other benchmarks, and sets expectations for how OpenAI and Anthropic will be treated when they go public.
What different sources said
- CNBCCenter
The S&P 500 already made a big call on SpaceX stock and index fund investors need to know it
- Yahoo FinanceCenter
VOO vs. VTI: Should You Own the S&P 500 or the Entire Market?
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