> S&P rules are supposed to make the index reflect the market.

Where did you find that? Link?

I ask because common understanding is that the index is a stable tracker of the market, specifically to exclude volatility.

IOW, it reflects a smoothed market, not a point-in-time-with-daily-granularity market. I would really like to know where you read what you read.

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tristanj 40 minutes ago | parent [-]

The S&P 500 brochure describes itself as "the best single gauge of large-cap U.S. equities". That language implies they act as a benchmark, which I find questionable, given that based on their current eligibility requirements, it would exclude all three of SpaceX, Anthropic, and OpenAI.

All three companies are in the top 10 largest companies in the US by market cap, based on their current valuations. If these companies maintain their valuations over the next year, they'd still be ineligible under current rules. Because none of them are GAAP, they're all heavily reinvesting cash-flow into growth. These companies may be excluded from the S&P500 for potentially years, until they reach 12 months of profitability.

A benchmark of the U.S. stock market that excludes multiple of the 10 largest U.S. companies cannot be taken seriously.

https://www.spglobal.com/spdji/en/brochure/article/sp-500-br...

	▲	ywvcbk 34 minutes ago \| parent [-]
		S&P 500 weights are based the value of shares available on the public market not the market cap. Based on that SpaceX will be nowhere near the top 10. Do you think their valuations wouldn't fall dramatically if they were willing to float a significant proportion of their shares on the market anytime soon.