On Friday evening, shares of Dell and Palantir rose about 7% when it was announced that these companies would join the prestigious S&P 500 index. The move was part of a regular reassessment of the S&P Global Index, which tracks the 500 largest publicly traded companies in the United States. Software company Palantir will replace American Airlines in the index, while technology company Dell will replace Etsy.
Shares of companies that are newly added to the S&P 500 often see growth. This is because many funds tracking the index's performance must regularly adjust their portfolios to include the new index members, leading to greater demand for their stocks.
Dell's return to prominence
For $DELL, a maker of computers and servers, the announcement marks a return to the S&P 500 index, where the company was a fixture from 1996 until 2013. In 2013, company founder Michael Dell decided, along with investment company Silver Lake, to take the company back into private ownership. Dell returned to the…