Reddit shares surge 10%, joining the S&P 500 index

S&P Dow Jones Indices will add Reddit (RDDT) to the S&P 500 index. The change becomes effective before the market opens on August 18. Reddit replaces AvalonBay Communities Inc., which is being acquired by Equity Residential.

Reddit shares surged more than 10% in after-hours trading following the announcement. Exchange-traded funds and mutual funds tracking the index must purchase the stock to rebalance their portfolios.

The move signifies Reddit's growing market presence since its initial public offering.