Reddit jumps 11% after S&P 500 adds stock effective Aug. 18
Why it matters: Index funds tracking the benchmark will need to buy shares, a move that often lifts newly added stocks.
Reddit shares rose 11% in extended trading Thursday after S&P Dow Jones Indices added the social media company to the S&P 500, effective Aug. 18. Reddit will replace AvalonBay Communities in the benchmark. Stocks often gain after joining major indexes because funds that mirror those benchmarks must purchase the new constituent. Reddit becomes only the second pure-play social media company in the S&P 500 alongside Meta. The move follows Reddit’s late-July second-quarter report, which marked its eighth straight quarter of revenue growth above 60%, even as the stock had recently come under pressure over uneven search referrals tied to changes in Google’s Gemini-powered AI Overviews.