S&P 500— The S&P 500 hovered near record territory on Monday as renewed optimism over U.S.-China trade negotiations supported investor sentiment.
However, index watchers were caught off guard after S&P Dow Jones Indices opted to make no changes to the S&P 500 in its quarterly rebalance—a decision that notably excluded Robinhood (HOOD) despite its strong recent performance.
Stocks traded mixed as the S&P 500 remained flat, the Dow Jones Industrial Average dipped 75 points, and the Nasdaq Composite ticked up 0.15%.
The broad-market index is now just 2.4% below its February peak of 6,144.15, continuing a dramatic recovery after falling nearly 19% earlier this year.
Trade Talks Fuel Gains, but Volatility Lingers
Investors remain cautiously optimistic as U.S. and Chinese officials resumed trade negotiations in London. Markets have rallied in recent weeks on the belief that President Trump’s earlier aggressive stance on tariffs is softening.
“The market is headline-sensitive,” said Richard Saperstein, CIO at Treasury Partners. “Tariff news can trigger volatility, but the direction seems more constructive now.”
The S&P 500 has climbed more than 20% from its April lows, buoyed by improving economic data and a pullback in tariff threats. Analysts say if the index reaches a new high, it would officially mark the end of the correction that began in March.
Robinhood, AppLovin Among Top Snubs in Index Rebalance
While market momentum is pushing major indexes higher, some high-flying stocks were left out of the S&P 500’s latest reshuffle. Robinhood, which surged 13.2% last week to a record high, fell 5% early Monday after being passed over.
AppLovin (APP), Carvana (CVNA), Interactive Brokers (IBKR), and Vertiv (VRT) also failed to make the cut.
This marks the first time since March 2022 that no companies were added or removed from the S&P 500 in a quarterly review.
“Robinhood was one of the most anticipated additions,” said a market strategist. “Its exclusion suggests the index committee is being cautious despite the stock’s strong fundamentals and price momentum.”
Other stocks saw similar reactions:
- AppLovin dropped 3.6% after gaining 6.3% last week.
- Carvana lost 2% Monday but hit a fresh high last week.
- Interactive Brokers fell 5%, and Vertiv edged lower after both saw gains last week.
Analysts Still See Upside for S&P 500
Major banks, including Goldman Sachs, JPMorgan, and Deutsche Bank, have recently raised their year-end targets for the S&P 500, citing improved economic outlooks and easing trade concerns.
JPMorgan now expects the index to hit 6,000, while Deutsche Bank predicts a rise to 6,550 by year-end.
“The tariff drag is now seen as far less severe than expected,” Deutsche Bank analysts said in a recent note.
CFRA’s Sam Stovall noted that if the S&P 500 breaks its February record, it could trigger an extended rally—historically averaging 10% over the next four months following a correction.