The S&P 500’s latest quarterly rebalance offers a fascinating snapshot of where investors believe the U.S. economy is headed. Effective June 22, 2026, the index will add Marvell Technology and Flex while removing Pool Corporation and Campbell’s Company. While index changes are often viewed as routine housekeeping, they frequently provide insight into broader market trends and the evolving composition of corporate America.
A Sign Of The Times
The S&P 500 is increasing its exposure to the AI and data center buildout that has swept the market narrative with this rebalance. Marvell Technology, a semiconductor and custom-chip designer, and Flex, a contract manufacturer and data-center infrastructure supplier, will be the newest constituents of the S&P 500. Both companies sit squarely in the heart of the AI wave that has driven much of the market’s gains this year. Notably, Marvell will join the index at roughly the 50th largest holding with a market value of nearly $300 billion (FactSet data as of 6/18/2026). These inclusions underscore how AI-related businesses are increasingly shaping the composition of major market benchmarks.
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On the other side of the ledger are Pool Corporation and Campbell’s Company. Pool, a distributor of swimming pool supplies and equipment, enjoyed explosive growth during the pandemic-era housing boom but has struggled amid normalization in housing-related activity. Campbell’s, one of America’s most recognizable food brands, has become one of the smallest constituents in the index by market capitalization. Notably, both companies will migrate to the S&P SmallCap 600 following their removal and bypass the S&P MidCap 400.
Momentum Begets Momentum
To steal a line from our very own Sonu Varghese, Chief Macro Strategist, ‘momentum begets momentum’ and, in my opinion, is a defining characteristic of both individual stock returns and indexing. The idea is simple: stocks going up often continue their gains, and stocks going down have a tough time reversing the decline. This index rebalance is no exception. As shown below, on the date of announcement of this rebalance, both Marvell and Flex were up more than 100% year-to-date, and on average have continued their outperformance since the announcement (potentially driven by investor anticipation of gaining passive buying pressure). Meanwhile, both Pool and Campbell’s were negative on a year-to-date basis on the day of the announcement. While the two have slightly outperformed the index since this announcement on average, they both remain steep underperformers on a year-to-date basis.
The S&P 500’s latest change is a sign of the times and reinforces the momentum effect in markets. Two technology-oriented companies tied to AI infrastructure are entering the benchmark, while two consumer-facing companies are exiting. The message is difficult to miss: today’s market leadership and relative stock returns are increasingly tied to the digital infrastructure powering artificial intelligence, and less so to the once dominant consumer.
For more content by Blake Anderson, CFA®, Director, Portfolio Management, click here.
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