Nike (NKE.US) is set to be removed from the S&P 100 Index, concluding its nearly 18-year run as a component of that benchmark. In response to market questions triggered by the news, the company's investor relations team has clarified that this change applies only to the S&P 100, and Nike continues to hold its place in the S&P 500 Index. The adjustment will not impact the company's business operations, strategic direction, or its public listing status.

According to the quarterly rebalancing results previously disclosed by S&P Dow Jones Indices, Nike will be officially removed from the S&P 100 on September 21, marking the end of its membership that began in late 2008. Joining Nike in this removal are Honeywell Aerospace (HONA.US), Simon Property Group (SPG.US), and Colgate-Palmolive (CL.US). Taking their places in the index will be Dell Technologies (DELL.US), Palo Alto Networks (PANW.US), Arista Networks (ANET.US), and SanDisk (SNDK.US).

Nike has emphasized that it remains a constituent of the S&P 500 Index and that this index change will not alter its business, strategy, operations, or exchange listing. The company declined to provide additional commentary on the matter.

The removal of Nike from the S&P 100 is closely tied to the sustained decline in its stock price and market valuation in recent years. As of now, Nike's shares have dropped more than 40% year-to-date and are on track for a fifth consecutive annual loss. The company's current market capitalization stands at approximately $55 billion, a reduction of over 80% from its all-time high of roughly $281 billion reached in November 2021. In contrast, both the S&P 100 and S&P 500 indices have posted gains this year and are poised for a fourth straight year of positive returns, widening the performance gap between Nike and the broader U.S. large-cap market.

While being dropped from the S&P 100 does not fundamentally alter Nike's underlying business, index rebalancing events typically draw significant investor attention. Passive funds that track these indices are required to adjust their holdings accordingly, which can create buying or selling pressure around the effective date. Data shows that the iShares S&P 100 ETF, which tracks the S&P 100, currently manages around $20 billion in assets and holds approximately $19 million worth of Nike shares. As a result, this fund and other passive vehicles following the S&P 100 may need to liquidate their positions in Nike once it is removed.

However, compared to the scale of assets tracking the S&P 500, these potential sell orders are relatively limited. The Vanguard S&P 500 ETF, which follows the broader index, manages more than $1 trillion in assets and holds over $700 million in Nike shares. Additionally, a similarly sized State Street S&P 500 fund holds roughly $560 million in Nike stock, while the iShares Core S&P 500 ETF has approximately $575 million invested in the company. Since Nike remains a member of the S&P 500, these large passive funds will not be compelled to sell Nike shares as a result of the S&P 100 adjustment.