BlockBeats News, June 26th. The semi-annual FTSE Russell index reconstitution will officially take effect after the U.S. stock market closes this Friday. The most notable change in this adjustment is that NVIDIA will replace Apple as the largest weighting stock in the Russell 1000 Index, with Apple dropping to the third position. Walmart will enter the top ten weighting stocks for the first time. In addition, AI concept companies such as SpaceX and CoreWeave have also been included in the index system, further increasing the proportion of AI-related companies in the index. The preliminary list shows that a total of 62 companies will be newly included in the Russell 1000 Index, and 237 will enter the Russell 2000 Index. Alphabet and AMD will be removed from the Russell 1000 Value Index and entirely classified under the growth attribute. Jay Woods, Chief Market Strategist at Freedom Capital Markets, described it as the "Wall Street List Trimming Day" — where thousands of companies are repositioned among different indices based on their latest market capitalization, with winners moving up and laggards moving down.

Compared to previous years, this year's FTSE Russell index reconstitution coincides remarkably with the U.S. quarter-end pension fund rebalancing window, leading to a dual impact of fund flows on the market. Goldman Sachs predicts that U.S. pension funds will net sell approximately $30 billion worth of stocks at the end of this quarter. With simultaneous passive index rebalancing and pension fund rebalancing activities, the closing hours on Friday may become one of the most intense and volatile trading periods of the year in terms of fund flows.

JPMorgan Chase pointed out that companies promoted from the Russell 2000 to the Russell 1000 generally exhibit stronger growth attributes, higher volatility, and pay lower dividends. As these companies exit, the overall dividend yield for the companies remaining in the Russell 2000 is expected to increase by approximately 16.5%. This structural change will have a profound impact on investors employing income or value-oriented strategies and benchmarked against the Russell 2000.