Wednesday Mar 6 2024 08:37
3 min
S&P Dow Jones Indices, the entity responsible for the oversight of the benchmark S&P 500 index, announced the inclusion of two dynamic companies into the index, set to give more weight to the technology and consumer discretionary sectors while diminishing the industrial and financial segments.
Effective March 18, the index will welcome a leading tech firm and a prominent footwear brand, both of which have captivated investors' attention recently:
Super Micro, known for its advanced servers crucial for artificial intelligence (AI) applications, has seen its stock value skyrocket by 218.5% this year, following a staggering 1,003% increase in 2023. This surge is attributed to the burgeoning influence of AI on the tech landscape — a sectoral shift as significant as the advent of the World Wide Web.
The fervor for AI has also propelled chipmaker Nvidia to become the third-most valuable company in the U.S., with its stock up 66.2% this year after a 239% jump in 2023. This trend underscores the growing investor interest in companies involved in AI technology and related equipment manufacturing.
Deckers, a company catering to outdoor enthusiasts with its footwear and accessories, has also performed impressively. Based in Goleta, California, Deckers' shares have increased by 35.1% this year, following a 67.5% rise in 2023.
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By the end of February, the information technology sector constituted 29.8% of the S&P 500's total value, with consumer discretionary stocks making up 10.6%.
The addition of Super Micro and Deckers to the S&P 500 will result in the removal of appliance maker Whirlpool Corp., a stalwart founded in 1911, and regional banking company Zions Bancorp, established in 1873, both of which will move to the S&P Midcap 400 Index.
This change reflects S&P Dow Jones Indices' practice of updating its indices to mirror current market conditions and the evolving landscape of the "large-cap market space."
The S&P 500, being a market-cap-weighted index, will see a notable shift as Super Micro's market cap of $50.6 billion is 4.4 times larger than the combined market caps of Whirlpool and Zion, which stand at close to $11.5 billion.
At the time of writing, the S&P 500 index was up over 7.5% so far this year, trading around the 5,130 mark on March 4.
When considering indices or shares for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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