Mega-Caps Fall, Russell Rebalance

There are still a few trading days left in June, but so far it has been a rough month for the world’s largest stocks.  In the month where SpaceX (SPCX) began trading as the biggest IPO in history with a market cap near $2 trillion, the eight largest stocks in the S&P 500 have all fallen at least 8%, with six of eight down 10%+.  Did SpaceX suck the life out of the rest of its mega-cap brethren?

Notably, the eight largest stocks are all down this month for an average decline of 13.7%, but the next nine largest stocks are all up this month for an average gain of 7.6%.

Tomorrow we’re also going to see one of the biggest rebalances in history for key Russell indices.  With the halfway point of 2026 coming up, Russell is rebalancing its indices by moving stocks in and out of its large-cap Russell 1,000 and small-cap Russell 2,000.

The small-cap Russell 2,000 is sitting on a nice 20% gain this year mostly on the back of its largest index members.

The peak market cap for inclusion in the small-cap Russell 2,000 has historically been $5.7 billion, but right now there are 165 stocks in the index with market caps above that mark, including six stocks with market caps above $20 billion, and two above $50 billion.  Bloom Energy (BE) is the Russell 2,000’s largest stock by far at $87.1 billion.  It’s up more than 1,100% over the last year.

Russell doesn’t provide a full list of the stocks moving up into the large-cap Russell 1,000 from the small-cap Russell 2,000, but they’ve said that 43 stocks will be making the jump tomorrow.  Simply looking at the largest stocks in the Russell 2,000 gives you a pretty good idea of which ones will be graduating into the Russell 1,000.

Below is a list of the 25 largest Russell 2,000 stocks right now along with their year-over-year percentage change.  As shown, all 25 of these stocks are up over the last year for an average gain of 261%!

You can bet that the large majority of these names will no longer be in the Russell 2,000 when trading begins next week, meaning the index itself is going to look and act a lot different in the second half of the year.

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