SpaceX IPO puts index funds on track to buy into Musk’s company

SpaceX’s Wall Street debut has put Elon Musk’s rocket company on a likely path into major stock indexes, a shift that could make it part of many retirement portfolios. The Associated Press reported that SpaceX was valued at $2.1 trillion after its shares rose 19.2% in their first day of trading.

That valuation, if sustained, would make the company large enough to qualify for some of the most widely tracked market benchmarks. AP reported that the company is now worth more than Exxon Mobil, Bank of America and Coca-Cola combined.

The potential index additions matter because many 401(k) plans and other retirement accounts use funds that mirror indexes rather than picking stocks one by one. Those funds buy the companies in their benchmark, which means investors can end up owning a stock even if they did not choose it directly.

Index funds could be forced buyers

Indexes are designed to measure parts of the market, from a narrow group of large companies to broad collections of U.S. stocks. AP reported that the S&P 500 remains the most influential U.S. stock index, with trillions of dollars either tracking it directly or using it as a benchmark.

Passive investing has grown because index funds tend to charge lower costs than actively managed funds. AP cited Morningstar data through 2025 showing that 21% of actively managed U.S. stock funds both survived and beat their average index peer over the previous decade.

AP also reported that investors had more money in U.S. index funds than in actively managed funds starting in 2024, with the gap widening afterward. The Investment Company Institute said more than 1,000 index funds were available at the end of last year, including 185 tied to the S&P 500, according to AP.

Nasdaq may move faster than the S&P 500

Nasdaq has changed its rules so some very large companies can enter the Nasdaq 100 after 15 trading days, AP reported. The index had previously waited for its annual December reshuffling to add companies that qualified among the 100 largest nonfinancial firms on Nasdaq.

That change could affect investors in funds tied to the Nasdaq 100. AP reported that Invesco’s QQQ exchange-traded fund, a popular Nasdaq 100 tracker, has about $477 billion in assets, meaning its holders could gain SpaceX exposure if the company joins the index.

S&P Dow Jones Indices is taking a slower approach. AP reported that the S&P 500’s operator is not changing its rules for SpaceX or other mega-sized IPOs, and requires a company to trade on an eligible exchange for at least 12 months before joining.

The S&P 500 also has a profitability test. AP reported that SpaceX lost $4.9 billion last year and another $4.3 billion in the first quarter of 2026, and that the company has said it may not become profitable in the future.

Governance concerns follow index exposure

Some public pension officials have raised objections before index funds buy in. AP reported that leaders connected to pension funds for workers including firefighters and teachers in California and New York sent SpaceX a letter criticizing its corporate governance.

The officials focused on Musk’s control through a special class of stock with extra voting power. According to AP, the letter said such control could make Musk “essentially” impossible to remove without his consent.

Other large private companies may soon pose similar questions for index providers. AP reported that Anthropic and OpenAI are also preparing for possible U.S. stock-market debuts and could each approach valuations near $1 trillion.

Investors who want to avoid certain companies must look for funds with narrower rules, AP reported. Some indexes exclude companies based on governance or other criteria; AP noted that the S&P 500 ESG index removed Tesla in 2022.

This story draws on original reporting from Fortune.