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The S&P 500 inclusion effect springboard is back in a big way

That temporary price bump had cooled throughout the 2010s — now it’s heating up again, per a new Goldman Sachs report.

7/24/25 10:48AM

It’s not unusual to see shares pop when a company is set to join the S&P 500, an index now linked to a staggering $20 trillion in global assets. Just last Friday, Block soared 10% after its inclusion was announced, while Datadog spiked 15% on similar news earlier this month.

Known as the “S&P 500 Index Effect,” this short-lived bump is fueled in part by fresh demand from $13 trillion worth of passive funds and ETFs tracking the benchmark, which are required to buy shares of newly added companies.

But over the past decade, this effect had been losing steam. According to a 2023 Harvard study, the average announcement day return for S&P 500 additions dropped from 9.4% in the 1990s to just 0.8% by the late 2010s — partially because markets got better at absorbing these shocks, and traders got better at predicting inclusions.

Now, though, a new Goldman Sachs analysis suggests the inclusion effect may be staging a comeback.

Since 2021, stocks newly added to the S&P 500 have outperformed the equal-weighted index by an average of 4 percentage points on the announcement day — with nearly three-quarters of those stocks beating the benchmark.

Source matters

One factor driving the revival is that fewer companies are migrating from the S&P MidCap 400 Index. Per Goldman’s estimate, stocks added from outside the S&P 400 have seen average relative gains of 5.3 pp since 2013, while those graduating from the midcap index actually dipped 0.4 pp.

Retail hype may also be adding fuel, with recent entrants like Coinbase, Super Micro Computer, Palantir, and Datadog already beloved by traders ahead of their debut — and tied to popular themes like AI or crypto.

So, which big names could be next in line for America’s flagship index?

Go Deeper: Datadog is now in the S&P 500. These big stocks still aren’t.

Max Knoblauch3h

Advance Auto Parts climbs as store closures power earnings beat amid revamp

Shares of Advance Auto Parts are up more than 8% in early trading on Friday, following the release of the company’s fourth-quarter results.

Advance Auto posted adjusted earnings of $0.86 per share in Q4, more than twice the $0.41 per share expected by analysts polled by FactSet. Same-store sales grew 1.1%, below the 2.2% consensus.

The retailer closed 522 stores in its fiscal year 2025 as part of an overhaul it first announced in 2024. It plans to open between 40 and 45 stores this year.

Looking ahead, Advance Auto said it expects comparable-store sales to grow between 1% and 2% in 2026. Wall Street expected 2.13%.

Luke Kawa

In-line core CPI inflation a relief after recent history of January price spikes

The January CPI report is out.

Luke Kawa4h

Applied Materials soars as Wall Street scrambles to boost price targets after “narrative-changing quarter”

Wall Street has fresh conviction that Applied Materials is a winner as the AI boom forces an expansion of chipmaking capacity.

The semicap company reported a top- and bottom-line beat, along with Q2 guidance that exceeded estimates, after the close on Thursday, sending shares sharply higher. Applied Materials is trading up double digits as of 8 a.m. ET.

“This is finally the narrative-changing quarter that we have been waiting for,” wrote Needham & Co. analyst Charles Shi, who boosted his price target to $440 from $390. “With AMAT shaking off the bad China narrative and returning to a strong AI-driven beat-and-raise cycle, we expect AMAT valuation gap vs. peers will narrow as AMAT should re-rate higher.”

The numbers speak for themselves, but the words on the conference call didn’t hurt either.

“Management’s decidedly more constructive tone on the call (relative to a more muted/conservative tone on the last call) we think was underpinned by a sharp acceleration in customer orders and activity levels in the quarter,” wrote JPMorgan analyst Harlan Sur, who lifted his price target to $400 from $260.

He spotlighted the strong outlook for its advanced packaging business given “AMAT’s #1 position in HBM where spending is inflecting higher as the absorption of previously shipped equipment concludes and additional capacity/capability is required amid burgeoning demand growth and customers’ rapid technology transitions (HBM3e > HBM4 > HBM4e and beyond).”

Other sell-side shops that took a more more optimistic view and upped their price targets include:

Keybanc, up to $450 from $380;
Barclays, up to $450 from $360;
Wells Fargo, up to $435 from $350;
Citi, up to $420 from $400;
Morgan Stanley, up to $420 from $364;
And Mizuho, up to $410 from $370.

Applied Materials jumps after posting better-than-expected Q1 results, strong Q2 outlook

The numbers speak for themselves, but the words on the conference call didn’t hurt either.

Other sell-side shops that took a more more optimistic view and upped their price targets include:

Keybanc, up to $450 from $380;
Barclays, up to $450 from $360;
Wells Fargo, up to $435 from $350;
Citi, up to $420 from $400;
Morgan Stanley, up to $420 from $364;
And Mizuho, up to $410 from $370.

J. Edward Moreno

Moderna reports Q4 earnings beat, upbeat 2026 outlook

The report comes after Moderna said the FDA is refusing to consider an application for its mRNA flu vaccine.

Luke Kawa6h

Plug Power wins shareholder approval to boost its share count, avoiding reverse split and paving the way for more dilution

After the close on Thursday, Plug Power revealed that it received sufficient shareholder support to increase its share count.

This approval paves the way for the hydrogen fuel cell company to raise more money via share offerings, something it’s announced 20 times since its IPO, according to data from Bloomberg.

Management had urged shareholders to vote in favor of this proposal. It’s a sign of how important retail investors are to Plug that CEO Andy Marsh even hosted an AMA on Reddit to build support among the community.

pic.twitter.com/oX40uY1Uct
— Plug Power Inc. (@PlugPowerInc) February 12, 2026

If this measure had failed to get a “yes” vote from the majority of shareholders, Plug warned that it would have been forced to proceed with a reverse stock split (which would have raised the per-share price) in order to issue more shares.

“Without additional authorized shares, the Company will not be able to: meet its contractual obligations to increase authorized shares of common stock by February 28, 2026; raise capital necessary for operations and growth; and execute on its business plans and strategy,” the company said in a November filing.

Plug is aiming to capitalize on the data center-driven bid for power by offering auxiliary solutions.