Block is expected to join the S&P 500, and investors are reacting to the development. The shares of the company rose by 10% after hours after S&P Global announced that Block will replace Hess in the index starting before the opening bell on July 23. The move follows Chevron’s $54 billion acquisition of Hess, completed after the oil giant came out on top in a legal fight with Exxon Mobil over drilling rights in Guyana.
The change is one of two that happened this week. On Monday, S&P Global also confirmed that The Trade Desk will take over Ansys’ place after Synopsys closed its deal to acquire the software firm on Thursday. While most of these index swaps happen during regular quarterly rebalancing, mergers like this one fast-track the process. Last week, Datadog moved into the index to fill the spot left by Juniper Networks.
Block moves into S&P 500 as tech expands
This latest development means the index has more tech weight, continuing a trend that’s been on for years. Jack Dorsey launched Block in 2009. At the time, the company was called Square. It made a name for itself with sleek payment terminals before branching out into crypto, lending, and broader financial services. It rebranded as Block in 2021 to match its growing interest in blockchain infrastructure.
Block’s jump into the S&P 500 puts it above many of its peers in terms of valuation. Even though its stock is down 14% this year, it still holds a market cap of around $45 billion, which is well above the median for companies in the index. For context, the Nasdaq is up over 8% this year, and the S&P 500 itself has gained about 7%, meaning Block’s underperformance hasn’t stopped it from climbing into the top tier.
The stock jump didn’t come from better earnings or any new product drop. This is all about portfolio managers being forced to buy Block to track the S&P 500 exactly. When a company gets added to the index, massive funds have no choice but to load up. That buying pressure sent the price up instantly.
Still, things haven’t exactly been smooth for the company. In May, Block reported first-quarter results that missed expectations, and it followed up with a downbeat forecast for the second quarter and the full year. That guidance came with a warning about the overall U.S. economy, especially following tariff actions by President Donald Trump that tightened conditions for a lot of businesses.
“We recognize we are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year,” Block wrote in its latest quarterly filing. The next major checkpoint for the company is coming fast. Block is expected to report second-quarter earnings on August 7, after the close of markets. Investors, already tied to the stock through index exposure, will be watching closely.
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