Premarket movers highlight Reddit jump after S&P 500 addition

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Premarket movers: Reddit S&P jump

Highlights

Reddit jumps 12% premarket after S&P Dow Jones Indices announces its inclusion in the S&P 500 on Aug. 18, replacing AvalonBay Communities.
Applied Materials drops over 5% premarket after adjusted Q2 earnings of $3.50 per share and revenue of $9.12 billion fail to impress investors.
Wayfair gains 4% after Bernstein upgrades to outperform on high single-digit U.S. revenue growth, while Fox rises 2% on analyst upgrades and Roku acquisition momentum.

Index changes and rating actions drive early moves

As reported by CNBC, Reddit is surging 12% after S&P Dow Jones Indices said the social media company will join the S&P 500 starting Aug. 18, replacing AvalonBay Communities.

Wayfair is gaining 4% after Bernstein upgraded the online furniture retailer to outperform from market perform. Bernstein analysts say Wayfair is delivering high single-digit revenue growth in the U.S. furniture market even as the broader market is not growing.

Fox Corporation is adding 2% after receiving upgrades from JPMorgan and Wells Fargo. Analysts at both banks point to momentum in Roku, which Fox is acquiring for $22 billion.

Sandisk is climbing 5% after a JPMorgan analyst upgraded the stock to overweight from neutral. The analyst says Sandisk's long-term agreements under its new business model have lifted its margin profile and reduced cyclicality by shifting much of its revenue toward longer-dated, high-margin arrangements.

Earnings pressure and deal speculation shape sentiment

Applied Materials is falling more than 5% in premarket trading after the semiconductor equipment maker posts fiscal second-quarter results that do not satisfy investors. The company earns an adjusted $3.50 per share on revenue of $9.12 billion, while sales in its semiconductor systems division total $7.04 billion, only slightly above the FactSet consensus of $6.96 billion.

Workday is up about 2% in premarket trading after a much sharper move in the previous session. The stock rallies nearly 18% on Thursday, its best session in 10 years, after Reuters reports that private equity firm Silver Lake is in talks to buy the company.

In our earlier article on Reddit’s upcoming inclusion in the S&P 500, we covered how the announcement sparked a sharp premarket jump as the stock was set to replace AvalonBay Communities. We also noted expectations that S&P 500 index-tracking funds could drive significant buying demand, while highlighting that new entrants often give back part of their initial gains in the months after inclusion.

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