Block, a fintech company founded by Jack Dorsey, co-founder and CEO of Twitter Inc. and Square Inc., is set to join the S&P 500, replacing Hess. This news caused Block shares to surge more than 10% in extended trading on Friday. The addition of Block to the S&P 500 comes after another recent change to the benchmark, with ad-tech firm The Trade Desk replacing software maker Ansys.
Hess’ departure from the S&P 500 follows Chevron’s successful $54 billion acquisition of the oil producer, which settled a legal dispute with Exxon Mobil over offshore oil assets in Guyana. Block is scheduled to officially join the S&P 500 on July 23, leading to a rally in its stock price as fund managers adjust their portfolios to reflect the change.
The tech-heavy S&P 500 has been increasingly dominated by technology companies in recent years, and Block’s addition further reflects this trend. Originally known as Square, the company rebranded as Block in 2021 to emphasize its focus on blockchain technologies. With a market cap of about $45 billion, Block is valued well above the median company in the index.
Despite its strong position in the market, Block shares have declined by 14% this year, underperforming the broader U.S. market. The company reported first-quarter results that fell short of Wall Street expectations, leading to a drop in its stock price. Block cited challenging economic conditions and a cautious macro outlook in its guidance for the rest of the year.
Looking ahead, Block is scheduled to report its second-quarter results after the close of regular trading on August 7. Investors will be keen to see how the company navigates the evolving economic landscape and whether it can regain momentum in the market.
Overall, Block’s addition to the S&P 500 underscores its growing influence in the financial technology sector and its potential for further growth and innovation in the future. As it joins the ranks of the S&P 500, Block is poised to make a significant impact on the index and the broader market.
