Block shares soar 10% on entry into S&P 500

Block, the fintech company founded by Jack Dorsey, is set to join the S&P 500, replacing Hess. This news caused Block’s shares to surge more than 10% in extended trading on Friday. This is the second change to the benchmark index this week, following the announcement that ad-tech firm The Trade Desk would be added to the S&P 500, replacing software maker Ansys.

Hess’ departure from the index comes after Chevron completed its $54 billion purchase of the oil producer, settling a legal dispute with Exxon Mobil over offshore oil assets in Guyana. Block is scheduled to officially join the S&P 500 before the opening of trading on July 23. Stocks typically experience a rally when added to a major index, as fund managers adjust their portfolios to reflect the changes.

The addition of Block brings more technology weight to the S&P 500, which has been increasingly leaning towards tech companies in recent years. Formerly known as Square, Block rebranded in 2021 to emphasize its focus on blockchain technologies. Despite a 14% decline in its shares this year, Block boasts a market cap of around $45 billion, placing it well above the median company in the index.

In May, Block reported first-quarter results that fell short of Wall Street expectations and issued a disappointing outlook, leading to a drop in its stock price. The company cited challenging economic conditions following tariff announcements by former President Donald Trump. Block is set to report its second-quarter results after the close of regular trading on August 7.

Overall, Block’s inclusion in the S&P 500 highlights its growth and expansion into various financial services, including crypto and lending. As the company continues to navigate a dynamic macro environment, investors will be closely watching its performance in the index. Stay tuned for updates on Block’s progress and market impact as it joins the prestigious S&P 500.