By Jack Pitcher

SpaceX isn't public yet, but Elon Musk's rocket maker might still be part of your portfolio before the month's end.

With the record public offering set to value the company at around $1.75 trillion -- likely among the top 10 most-valuable U.S. companies -- major stock index providers are divided on whether to rewrite their rulebooks to quickly account for this new behemoth, along with other giant IPOs expected from Anthropic and OpenAI later in the year. Nasdaq says yes. S&P Global says no.

Some index providers said including SpaceX promptly helps benchmarks accurately track the market faster. It also helps SpaceX, by creating a massive source of steady demand for the shares from index-tracking funds. Skeptics say early inclusion could increase risk in the $18 trillion market for passive funds.

Here's what to know:

What are the latest developments?

S&P Global's index arm on Thursday said it wouldn't ease requirements that companies entering the S&P 500 trade for a year and report profits across a four-quarter span, to the surprise of many investors. S&P had said it was considering waiving both requirements ahead of the megacap IPOs expected this year.

As of May 1, however, Nasdaq-listed companies have the chance to join the marquee Nasdaq-100 index within 15 trading days instead of waiting a minimum of three months to a year, as long as they have a market capitalization ranking within the top 40 current constituents. SpaceX plans to list on the Nasdaq.

Meanwhile, FTSE Russell just announced that large-cap companies can now be included in its series of indexes after five days of public trading, instead of waiting for the next annual review.

Who benefits?

Firstly, the companies.

Advisers for SpaceX reached out to major index providers to discuss how it and other hot startups might join key indexes sooner than normal, The Wall Street Journal reported earlier this year. Inclusion in major indexes can significantly boost demand for a company's shares from institutional asset managers that must buy in order to track their benchmarks.

Faster inclusion also helps indexes accurately track the universe of public companies, and means index-fund investors will have exposure to some of the biggest and hottest newly public companies faster than they otherwise would have. If your goal in owning a large-cap index fund is to be invested in all of the biggest U.S. firms , new fast-tracking rules help accomplish that sooner.

How much exposure to these mega IPOs will I have?

Less than you might think.

S&P's decision will keep the megacaps out of funds tracking the S&P 500 for at least 12 months. And while many major indexes use some form of market-cap weighting (meaning the more valuable a company is, the bigger its impact on the index) those can get modified for companies that have a low proportion of their total shares trading publicly.

The Nasdaq-100 will now allow so-called low-float companies into the index , for example, but cap their weight by valuing a company at three times the value of its free-floating shares. Float adjustments help prevent index-fund managers from being forced to sell big stakes in other companies to raise cash for a chunky new addition, or drive up prices by chasing a limited number of traded shares.

SpaceX is expected to sell around $75 billion of new shares in an initial offering that values that full company at $1.75 trillion, meaning less than 5% of shares would be floated for trading at launch.

If that scenario holds, it would initially be weighed like a $225 billion company (about the size of Citigroup). That would give it an initial weight of under 1% in the Nasdaq-100, analysts say, compared with something closer to 5% if it wasn't float-adjusted. That will also mitigate the immediate effect on funds such as Invesco's popular QQQ, a $500 billion behemoth which tracks the index.

Why are these decisions controversial?

SpaceX is expected to go public at an extremely expensive valuation based on metrics like price-to-revenue, and skeptics aren't excited about rule changes that could put the company into millions of Americans' retirement plans sooner.

Some say that allowing a company like SpaceX into an index soon after it starts trading mostly benefits early investors in the company, by allowing them to easily sell their stakes.

But S&P's move to keep profitability requirements avoids the most controversial issue, and maintains existing criteria for the most-popular U.S. index. Other indexes that simply include the largest companies argue that they are adding fast-tracking rules so they can accurately track the market sooner.

What should I expect?

Traditional waiting periods were generally in place to make sure that companies demonstrate stability and that their shares trade enough to handle extensive buying and selling. That is unlikely to be an issue for this new generation of massive companies.

But IPOs tend to be volatile in their first year of trading. And the rise of massive investment firms that provide private capital has allowed companies like SpaceX, Anthropic and OpenAI to stay private longer and grow much larger before tapping the public markets than U.S. investors are used to. Skeptics fear that these companies are raising money at a euphoric moment in public markets and further returns will be hard to come by.

Some analysts said the varying decisions made by index providers could spur greater divergence between the performance of funds tracking different indexes in coming months. Still, float adjustments mean that index-fund exposure to any one of these companies shouldn't be extreme at launch.

Write to Jack Pitcher at jack.pitcher@wsj.com

(END) Dow Jones Newswires

June 05, 2026 12:24 ET (16:24 GMT)

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