Robinhood Shares Slide After Missing S&P 500 Cut

On June 9, 2025, in pre-market trading, Robinhood Markets (HOOD) experienced a notable drop of approximately 5–5.7% (to around $70.6–$71.2) after S&P Dow Jones Indices announced that no changes would be made to the S&P 500 components during its quarterly rebalance.

🔍 What Triggered the Decline?

• Speculation has been building: Robinhood shares had sharply risen in the previous weeks, reaching their highest level since the company’s 2021 debut, on growing investor optimism about a potential S&P 500 inclusion.
• Analyst positioning: Firms like Bank of America tipped Robinhood as the “prime candidate” to join the benchmark index, while Barron’s also flagged other contenders like AppLovin, Interactive Brokers, and Cheniere Energy.
• Index criteria: To qualify for the S&P 500, a company must be U.S.-based, listed on a major exchange, have a market cap above about $20.5 billion, and meet profitability metrics. Robinhood met these standards—its market value stood around $66.1 billion—yet was still excluded.

📉 Market Impact Beyond Robinhood

• AppLovin (APP): This marketing and ad-tech company also dropped roughly 5–5.5% after missing out on inclusion.
• Extended effects: Other potential inclusions like Cheniere and Interactive Brokers saw smaller declines of 1.9–2.1%.
• Investment consequences: Inclusion in the S&P 500 is crucial since it prompts automatic buys from passive index funds, ETFs, and algorithmic investment strategies. Conversely, exclusion can reverse speculative gains, as seen with Robinhood and AppLovin.

💡 Why No Additions This Time?

• This rare decision—of no changes to the S&P 500 during a quarterly review—marks a departure from typical rebalancings where one or more companies are either added or removed.
• The lack of adjustments might reflect a cautious stance by the index committee or a strategic delay to closely monitor existing members, although S&P Dow Jones officials did not elaborate publicly .

📈 Bigger Picture: Equity Markets Today

• Wall Street futures remained subdued on the same morning amid rising expectations of U.S.–China trade negotiations in London.
• The broader equity tone, however, held steady, with the S&P 500 hovering above 6,000—near record highs—bolstered by resilient earnings data and strength in sectors such as tech and AI.

✅ Summary Table