Reddit Jumps 13.8% After S&P 500 Adds It, Forcing Funds to Buy 16.7 Million Shares
Updated
Updated · Yahoo Finance · Aug 17
Reddit Jumps 13.8% After S&P 500 Adds It, Forcing Funds to Buy 16.7 Million Shares
3 articles · Updated · Yahoo Finance · Aug 17
Summary
Reddit shares rose 13.8% after S&P Dow Jones Indices said the company will join the S&P 500 before the August 18 open.
J.P. Morgan estimates passive index funds must buy about 16.7 million shares—nearly three times Reddit’s 5.98 million average daily volume since its 2024 IPO—creating a mechanical bid.
AvalonBay Communities is leaving because Equity Residential is acquiring it; the combined company, to be renamed Vivmark Residential, will remain in the index while Reddit fills the vacancy.
The rally comes after a steep selloff: Reddit was down more than 31% this year and over 42% from its September 2025 high as management warned of choppy search referrals tied to Google’s AI Overviews.
S&P 500 additions often climb into the effective date and then fade once index buying ends, leaving August 18 as the next test of whether demand can hold.