S&P 500 welcomes new member: Financial technology company Block (XYZ.US) replaces energy producer Hess (HES.US)

American Financial Group, Inc., a technology company, Block (XYZ.US) (formerly Square) is set to be included in the S&P 500 index, highlighting the continued rise of digital payments and cryptocurrencies in the mainstream financial sector. According to an announcement from S&P Dow Jones Indices, this change in constituents will take effect before the market opens on July 23, with Block replacing Hess Corporation (HES.US) as a new member of the benchmark index. Following the news, Block's stock price surged by 14% after hours, with a positive market reaction. This adjustment stems from Chevron Corporation's $53 billion acquisition of Hess Corporation, leading the energy producer to exit the S&P 500 index. Block's promotion is seen as a milestone in its transition from a payments processor to a comprehensive financial technology platform - the company has expanded its peer-to-peer transfers, merchant services, and consumer lending businesses, with its industrial bank subsidiary Square Financial Services recently receiving approval from the Federal Deposit Insurance Corporation to directly offer consumer loans through its Cash App Borrow product. Of note is Block's integration of Bitcoin payment functionality into Square terminals, continuing founder Jack Dorsey's long-standing advocacy for cryptocurrency. Despite facing profitability challenges, the company's strategy in building Cash App into a versatile banking product is progressing. As a prominent figure in the digital assets space, Dorsey recently shared an open-source coding project on social platform X, further reinforcing community engagement in technology. Being included in the core US stock index not only enhances a company's market image, but also holds strategic significance amid the expansion of passive investment fund sizes. Conversely, stocks removed from the index may face stock price pressure as index funds rebalance their portfolios. This adjustment reaffirms that fintech companies are reshaping the competitive landscape of traditional financial markets through technological innovation and business expansion.