Reddit Joins the S&P 500 Tuesday. Here's What History Says Could Come Next -- and What Investors Should Know.

Reddit will join the S&P 500 on Tuesday, Aug. 18, replacing AvalonBay Communities. While the stock surged 13% on the announcement, historical research shows the index inclusion bump has shrunk significantly over decades—from 7.4% in the 1990s to less than 1% in the 2010s. Reddit's strong revenue growth and profitability are offset by concerns about Google's AI-generated search answers reducing referral traffic, and the stock's 40x earnings valuation leaves little room for disappointment.