Why is Reddit stock surging in aftermarket trade today?

Reddit's stock surged 12.0% in after-hours trading today after S&P Dow Jones Indices announced the social media platform will join the S&P 500 before the market opens on August 18. The news sent shares from a regular-session close near $158 to trade at $177.08 in the after-market, a level not seen since mid-July. The index inclusion is a powerful near-term catalyst, as every passive fund and ETF that tracks the S&P 500 is now obligated to purchase RDDT shares in proportion to its index weighting, creating a predictable wave of institutional demand.

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