Uber reminds passive investors they arent passive after all: The Daily Guardian

Abigail Brewer 1 year ago 2 min read

Uber stock (UBER) closed 2.2% higher on Monday following the announcement late Friday that the company would be joining the prestigious S&P 500. This development signifies that when people talk about “the stock market,” they will now be referring to a group that includes Uber.

The decision to join the S&P 500 also implies that there will be a significant number of compelled buyers of the stock, as many funds aim to align themselves with the index. Typically, when a company is added to the S&P 500, there is an average increase of 6.3% in its shares from the close before the announcement to the following day’s opening, and a substantial 11.2% increase between the announcement and when the shares are officially added to the index.

Since 1995, more than 700 changes have been made to the S&P 500, indicating that the index has experienced a complete turnover of its constituents since the end of the first Clinton administration. The current rally in the stock market has been significantly influenced by the “Magnificent Seven” stocks, including Microsoft, Apple, Amazon, and Tesla.

Alongside Uber, manufacturers Jabil and Builders FirstSource will also join the S&P 500. They will be replacing Sealed Air, Alaska Air, and SolarEdge, respectively. These changes reflect overarching market trends, such as the resurgence of US manufacturing and the widespread impact of ridesharing services on modern life.

The dynamic nature of the S&P 500 enables investors to gain exposure to every development currently shaping the market. The choice between “passive” and “active” investing lies not so much in the assets owned, but rather the costs associated with them.

For the latest stock market news and comprehensive analysis, investors can refer to Yahoo Finance.

Overall, the addition of Uber to the S&P 500 represents a significant milestone for the company and reinforces its presence in the stock market.