What Happened?

Shares of financial services company Robinhood (NASDAQ:HOOD) fell 5.3% in the afternoon session after the company wasn't added to the S&P 500 Index following the quarterly rebalancing.

On Friday, June 6, 2025, markets speculated that Robinhood was a strong contender to join the Index, meeting criteria such as a market value of at least $20.5 billion and GAAP profitability over the past four quarters, as well as the most recent quarter. HOOD's omission might force investors to adjust their expectations, at least for now.

The shares closed the day at $73.41, down 2% from previous close.

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What The Market Is Telling Us

Robinhood’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 6.3% on the news that stocks edged higher (Nasdaq +0.9%, S&P +0.6%) while momentum in the crypto space picked up amid concerns the proposed spending bill (One Big Beautiful Bill) would raise the already bloated US fiscal deficit, making it difficult to keep inflation under control. Inflation fears, partly triggered by the ongoing trade war, have driven a demand for safe-haven assets and alternative stores of value. These concerns are fueling demand for digital assets, with Bitcoin reaching a new all-time high in May 2025. For stocks like HOOD, this means more people are trading, which often translates into sales.

Robinhood is up 86.2% since the beginning of the year, and at $73.45 per share, it is trading close to its 52-week high of $74.88 from June 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $2,109.

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