- Reddit will replace AvalonBay Communities in the S&P 500 before the market opens on Aug. 18. [1] - RDDT shares rose 12.6% in Thursday’s extended session after the announcement. [1] - Passive funds that track the benchmark will need to add Reddit, but analysts remain focused on Google traffic and the durability of Reddit’s data-licensing revenue.
[2][3] Reddit will join the S&P 500 before trading begins Tuesday, Aug. 18, replacing AvalonBay Communities after S&P Dow Jones Indices announced the change Thursday. Reddit shares rose 12.6% in extended trading on Aug. 13. [1]
AvalonBay is being removed as it is acquired by S&P 500 constituent Equity Residential. The combined residential real-estate company is expected to remain in the benchmark under the name Vivmark Residential once the transaction closes. [4]
A trading catalyst, with operating risks still in view #
The addition should create automatic demand from mutual funds and exchange-traded funds that track the S&P 500, because those portfolios adjust their holdings to reflect index changes. The size of that buying will depend on Reddit’s eventual index weight and the funds’ tracking methods. [2]
Analysts’ concerns center on Reddit’s reliance on advertising and traffic from Google search, as AI-generated search answers can reduce the number of users sent to outside websites. Reports have also raised uncertainty around Reddit’s data-licensing relationship with Google, which has been viewed as an important part of the company’s AI monetization story. [3]
Companies mentioned #
Further sources #
[1] MarketWatch reported that S&P Dow Jones Indices will add Reddit to the S&P 500 … ↗
[[2] S&P Dow Jones Indices describes the S&P 500 as a benchmark index whose constitu… ↗](https://www.spglobal.com/spdji/en/indices/equity/sp-500/)
[[3] Recent reporting described concerns over Reddit’s Google search traffic and the… ↗](https://www.techrepublic.com/article/news-reddit-google-ai-partnership-ai-search-publishers-2026/)
[4] The reported S&P announcement said Reddit would replace AvalonBay because Equit… ↗
The stories that matter, in one email. Free — unsubscribe anytime.