Nike Is the Headline. The Reshuffle Is the Story.
Taken together, the reshuffle tells us more about how the market has been priced than about which of these businesses are better. That is what an index is built to show.
What The Nike Headline Leaves Out
Nike leaving the S&P 100 made headlines this week. Three other companies are leaving with it, and four are taking their places. Most of that received far less attention.
That asymmetry is the interesting part. Eight companies changed standing, but one name dominated the story. This says more about how we read index membership than it does about any of the eight businesses.
All four companies entering are classified as Information Technology. The four leaving come from four different sectors.1 Read quickly, that looks like a verdict: technology winning, everything else giving ground. It is closer to a re-sorting of which companies are taken to represent the market.
The Reshuffle Is Not A Contest
Every company entering was already in the S&P 500, and every company leaving stays in it. The S&P 100 is drawn from the S&P 500,2 so what happened is a promotion or a demotion inside a group all eight already belonged to. None of these eight companies entered or left the S&P 500.
The announcement does not pair the names either. It lists four additions and four deletions and describes no company as anyone's replacement.1 Dell did not beat Nike. Palo Alto Networks did not defeat Colgate-Palmolive. The index re-sorted a list it already held.
What moved is relative size. The four entrants are worth roughly $1.11 trillion between them, against roughly $250 billion for the four leaving.3 The companies coming in have grown large enough to sit among the hundred names the index is built to represent. The companies going out no longer do.
A Benchmark Is Not An Endorsement
Entry can reflect growing market strength, and exit can reflect decline. But neither tells us much about business quality or future returns.
The criteria tell us something, but not everything. They screen for size, liquidity, tradability and a minimum level of profitability: large enough, liquid enough, free-floating enough, and profitable under generally accepted accounting principles in the most recent quarter and across the trailing four.4 For the S&P 100, constituents are generally drawn from the largest S&P 500 companies with exchange-listed options, with sector balance also considered.5 The final decision rests with the Index Committee.
In other words, the screen establishes a minimum standard. It does not rank the businesses that pass.
Honeywell Aerospace shows why that distinction matters. It took its seat at the end of June, inheriting the one its parent had held before the aerospace business was separated out,6 and is losing it before completing a full quarter as a constituent. Its brief stay says more about the mechanics of the reorganisation than about the quality of the aerospace business.
Nike is the harder case because its removal does track a real decline in relative market value. Even then, the index cannot answer whether Nike is a good business to own from this point.
That is the limit of what membership can tell us.
An index reflects where market value has already accumulated, not where it will go next. Funds tracking the S&P 100 simply adjust their holdings to match the new composition. The benchmark records the market as it stands today; it does not tell us what compounds from here.
An index reflects where market value has already accumulated, not where it will go next. Funds tracking the S&P 100 simply adjust their holdings to match the new composition. The benchmark records the market as it stands today; it does not tell us what compounds from here.
The Labels Understate What They Measure
Four entrants from a single sector is still worth noticing. Information Technology already accounted for 37.9% of the S&P 500 at the end of August, against 12.3% for Financials, the next largest sector.7
The real exposure is wider than that. Alphabet and Meta sit under Communication Services, while Amazon and Tesla sit under Consumer Discretionary.8 Meta remains overwhelmingly advertising-driven, Alphabet took 73% of its 2025 revenue from advertising,9 and Amazon earned more than half its 2025 operating income from Amazon Web Services rather than from retail.10 Four of the largest technology businesses in the market are filed somewhere other than technology.
Classifications are still useful. They organise companies, make comparison possible, and give a shared vocabulary for describing how a market is built. But they are labels applied by a committee, and they record where a company was filed rather than what drives its economics.
Which means the market carries more technology exposure than the sector table shows, not less. That is what makes this reshuffle worth a second look, rather than the four names involved. Capital has continued to gather in businesses built on software, computing and networks, whether or not they are filed under that heading.
Where the Index Stops
Taken together, the reshuffle tells us more about how the market has been priced than about which of these businesses are better. That is what an index is built to show. It records where value has accumulated and which companies have become most representative of the market today. It does not tell us which will create the most value from here.
That is where the investment question begins.
Does the reshuffle argue for owning the hundred largest companies, and the four newest of them most of all? Or is there something worth examining among the four leaving, where expectations have already come down?
Neither follows. Entry is not a recommendation and exit is not a discount. A company can grow large enough for consideration through rising profits, a higher valuation multiple, or both. Size is a large part of the screen, but it is not the conclusion.
What the reshuffle gives us is eight businesses whose relative standing has shifted enough to deserve another look. Whether any of them is a good business at a sensible price is a separate question, and the index cannot answer it.
Footnotes:
Footnotes (10)
- S&P Dow Jones Indices, "Bloom Energy, Illumina, and Everpure Set to Join S&P 500; Others to Join S&P 100, S&P MidCap 400, and S&P SmallCap 600", 4 September 2026. Entering the S&P 100: Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk, all classified as Information Technology. Leaving: Nike (Consumer Discretionary), Honeywell Aerospace (Industrials), Simon Property Group (Real Estate) and Colgate-Palmolive (Consumer Staples). The release lists additions and deletions and does not name any company as another's replacement. All changes effective prior to the open of trading on 21 September 2026. https://www.prnewswire.com/news-releases/bloom-energy-illumina-and-everpure-set-to-join-sp-500-others-to-join-sp-100-sp-midcap-400-and-sp-smallcap-600-302870517.html
- S&P Dow Jones Indices, S&P U.S. Indices Methodology, July 2026, Index Construction: "S&P 100. Index Universe. Index constituents are drawn from the S&P 500." https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-us-indices.pdf
- Combined total market capitalisations at the close on 4 September 2026. Entrants: Dell Technologies approximately $339bn, Palo Alto Networks approximately $272bn, SanDisk approximately $255bn, Arista Networks approximately $244bn. Exits: Colgate-Palmolive and Simon Property Group approximately $71bn each, Nike approximately $57bn, Honeywell Aerospace approximately $50bn. Simon Property Group is calculated on common shares outstanding; including operating partnership units raises the figure materially. Index weights are float-adjusted and will differ from total market capitalisation, materially so where insider ownership is high.
- S&P Dow Jones Indices, S&P U.S. Indices Methodology, July 2026, Eligibility Criteria. Requirements cover domicile, exchange listing, organisational structure and share type, total company market capitalisation of at least USD 22.7 billion with security-level float-adjusted market capitalisation of at least half that threshold, an investable weight factor of at least 0.1, liquidity, and financial viability. Financial viability requires positive GAAP net income from continuing operations for the most recent quarter and for the sum of the most recent four consecutive quarters; equity REITs may be assessed on Funds From Operations. The market capitalisation guideline is reviewed at the beginning of each calendar quarter and updated as needed, and has stood at the current level since 1 July 2025.
- S&P Dow Jones Indices, S&P U.S. Indices Methodology, July 2026, S&P 100 constituent selection. Selection is at the discretion of the Index Committee. Generally the largest S&P 500 companies with listed options are selected, and sector balance is also considered.
- S&P Dow Jones Indices, "Honeywell Aerospace Set to Join S&P 500 & S&P 100; Others to Join S&P MidCap 400 and S&P SmallCap 600", 23 June 2026. Honeywell Aerospace replaced Honeywell International in the S&P 100 effective prior to the open on 30 June 2026, following the spin-off completed on 29 June. Post spin-off, Honeywell International was renamed Honeywell Technologies and remained in the S&P 500. https://press.spglobal.com/2026-06-23-Honeywell-Aerospace-Set-to-Join-S-P-500-S-P-100-Others-to-Join-S-P-MidCap-400-and-S-P-SmallCap-600
- S&P Dow Jones Indices, S&P 500 index data as at 31 August 2026. Information Technology 37.9%, Financials 12.3%. Total market capitalisation USD 68.83 trillion across 503 constituents. https://www.spglobal.com/spdji/en/indices/equity/sp-500/
- Global Industry Classification Standard sector assignments per S&P Dow Jones Indices constituent data, 31 August 2026.
- Alphabet Inc. 2025 Annual Report. Google advertising revenue of $294,691m against total revenues of $402,836m for the year ended 31 December 2025.
- Amazon.com, Inc. results for the year ended 31 December 2025. AWS segment operating income of $45.6bn against consolidated operating income of $80.0bn.
Disclosure: Glavcot Insights and its contributors may hold positions in securities discussed in this article. All content is provided for informational and educational purposes only. Nothing published by Glavcot Insights constitutes investment advice. Readers should conduct their own research and consult qualified financial professionals before making investment decisions.
Glavcot Insights is an independent equity research publication founded by Ryan Gallinera and managed under Glavcot LLP, Singapore.
Glavcot Insights is an independent equity research publication founded by Ryan Gallinera and managed under Glavcot LLP, Singapore.
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