Robinhood shares fall 5% after missing out on the latest S&P 500 index rebalance

Robinhood shares tumbled on Monday after the online broker was passed over in the latest S&P 500 rebalance, ending weeks of hope that it would earn a spot in the benchmark index.

In premarket trading, Robinhood’s stock slid by almost 5%, as reported by CNBC. It had jumped 3.3% on Friday, pushing last week’s gain to more than 13%, before S&P Dow Jones Indices announced after the close that the S&P 500 lineup would remain the same.

At the same time, other major stocks dropped, including the electric vehicle maker Tesla, which suffered a 2% dip. Baird had moved Tesla’s stock from ‘buy’ to ‘neutral’ on their preference list because Musk’s robotaxi plans were “a bit too optimistic.” The “considerable uncertainty” about Elon Musk’s relationship with Trump makes things worse.

Robinhood was a major contender to join the S&P 500 according to BoA

The quarterly rebalance, which normally takes place on the third Friday of the final month in each quarter, often drives billions of dollars of trading. Passive funds tied to the index typically buy large volumes of any company added in the days that follow.

A recent winner from this process was crypto exchange Coinbase, whose shares leaped 24% in the session after its inclusion was revealed last month.

Still, Robinhood has enjoyed a strong comeback this year. Its share price has roughly doubled, and it hit a fresh record high last week amid renewed strength in both stocks and cryptocurrencies. The firm had lost favor after the GameStop trading frenzy of 2021 faded and the collapse of FTX sparked a drop in digital assets.

Meanwhile, Robinhood Markets, Inc. completed its acquisition of Bitstamp on May 2, 2025, finalizing a deal first announced in June 2024. The $200 million transaction was paid entirely in cash.

Bitstamp, based in Luxembourg, is one of the oldest and most respected cryptocurrency exchanges, with a broad international reach and a loyal client base. Robinhood says the purchase marks a key step in its plan to broaden its presence in the global crypto market.