Block Surges on S&P 500 Inclusion: ETFs in Focus
Shares of Block Inc. XYZ jumped over 8.5% in extended trading on July 18, 2025, following news that the fintech company will join the S&P 500 index, replacing Hess. The addition becomes effective before the opening bell on July 23, according to a statement from S&P Dow Jones Indices.Recent Changes to the S&P 500This marks the second alteration to the benchmark index last week. Earlier, ad-tech firm The Trade Desk was added to the S&P 500, taking the place of software company Ansys. The latter was acquired by Synopsys in a deal that concluded on Thursday.Hess exited the index following Chevron’s successful $54 billion acquisition of the oil producer, beating Exxon Mobil in a legal dispute over valuable offshore assets in Guyana.Why Index Additions Boost StocksCompanies that join the S&P 500 typically experience a stock price boost. This is largely due to fund managers and index-tracking ETFs rebalancing their holdings to include the new entrant. While most changes happen during the S&P’s quarterly rebalancing, off-cycle adjustments occur in cases of mergers and acquisitions. For instance, Datadog recently replaced Juniper Networks as part of a scheduled quarterly shuffle.Tech Sector Gains Another MemberBlock’s addition further strengthens the tech presence within the S&P 500. Originally known as Square, the company gained widespread adoption through its payment terminals and later diversified into crypto, lending and broader financial services. The company rebranded to Block in 2021 to signal a stronger commitment to blockchain technologies.Performance and Market PositionBlock’s stock remains down 16% year to date, lagging the broader market. Note that the Nasdaq has climbed over 8%, while the S&P 500 has risen 7%. However, the stock has surged 14.5% over the past month. However, with a market capitalization around $45 billion, Block still ranks well above the median company in the index.ETFs in Focus Against this backdrop, investors can bet on exchange-traded funds (ETFs) like Twin Oak Endure ETF SPYA, VanEck Digital Transformation ETF DAPP, Amplify Digital Payments ETF IPAY, Fidelity Disruptive Finance ETF FDFF and iShares FinTech Active ETF BPAY. These ETFs are heavy on Block. The ETF SPYA invests about 7% weight in Block shares, while other ETFs invest in the range of 4% to 6% in Block shares. Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amplify Digital Payments ETF (IPAY): ETF Research Reports VanEck Digital Transformation ETF (DAPP): ETF Research Reports Block, Inc. (XYZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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