Robinhood Shares Drop 5% After S&P 500 Snub, Crypto Markets Hold Steady

Robinhood's stock tumbled 5% in premarket trading following its exclusion from the latest S&P 500 rebalance. The trading platform had surged 13% last week on speculation of inclusion, mirroring Coinbase's 24% June rally after its index addition. Market sentiment soured further as Tesla slid 2% on Baird's downgrade, citing Elon Musk's 'overly optimistic' robotaxi plans.

The quarterly rebalance typically triggers billions in passive fund flows, with crypto-adjacent stocks increasingly in focus. Robinhood's rejection comes despite a 100% year-to-date rally fueled by resurgent crypto trading volumes. Coinbase's precedent suggests index inclusion remains a potent catalyst for crypto-exposed equities.

While traditional markets wobbled, major cryptocurrencies showed resilience. The divergence highlights growing institutional differentiation between crypto-native assets and traditional equities with digital exposure. Market makers appear to be pricing crypto infrastructure stocks as a distinct asset class rather than pure proxies for token performance.