The composition of the S&P 500 will change at the end of October and the beginning of November: two constituents will be removed and two new companies will enter. They are “new” in the literal sense too, as both are spinoffs of two existing S&P 500 members, Honeywell and DuPont de Nemours.

Details

S&P Global has announced changes to the S&P 500 that will also affect the S&P SmallCap 600.

  • Solstice Advanced Materials will join the S&P 500 at the open on Friday, October 31. It is being spun off from Honeywell, which will remain in the S&P 500.

  • Qnity Electronics will join the index at the open on Tuesday, November 4. It is being spun off from DuPont de Nemours, which will also stay in the S&P 500.

  • Solstice will replace CarMax in the S&P 500. CarMax will be moved to the S&P SmallCap 600, from which USANA Health Sciences will be removed.

  • Qnity will replace Eastman Chemical in the S&P 500. Eastman Chemical will be moved to the S&P SmallCap 600, where it will replace Caleres.

According to S&P Global, CarMax and Eastman Chemical, as well as USANA Health Sciences and Caleres, no longer reflect the large-cap and small-cap segments, respectively.

Why it matters

Inclusion in the S&P 500 can make shares more attractive because index funds, which replicate index composition rather than pick securities, start buying them. Removal, in turn, can pressure stocks when funds sell to realign portfolios, Barron's noted last year.

Index inclusion should reduce selling pressure on Qnity and Solstice, Barron’s believes. Having the spun-off entities in the index should reduce some selling pressure on Qnity and Solstice. If they were not added to the index funds that track the S&P 500, or use the index as a benchmark, investors would be more likely to sell, Barron’s added.

Stock performance

CarMax shares were down 0.18% in post-market trading yesterday, October 27. USANA Health Sciences and Eastman Chemical shares fell 1.6% each, while Caleres dropped 1.5%. Honeywell was unchanged, and DuPont added 0.15% in the post-market.

The AI translation of this story was reviewed by a human editor.

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