Robinhood to join S&P 500 in watershed moment for US fintech sector

Sept 5 (Reuters) - Robinhood Markets HOOD.O will replace casino operator Caesars Entertainment in the benchmark S&P 500, marking a pivotal moment for the financial technology sector as the retail trading platform joins the ranks of the most influential U.S. companies.

The inclusion, announced by S&P Dow Jones Indices on Friday, is expected to boost demand for Robinhood's stock as index-tracking funds adjust their holdings. It also underscores Robinhood's evolution from a pandemic-era trading upstart to a company with sustained influence in the U.S. financial markets.

Credited with revolutionizing retail trading by eliminating commissions and making stock investing accessible through a user-friendly app, the platform has attracted a new generation of investors and reshaped how everyday Americans participate in financial markets.

Others set to join the S&P 500 are marketing platform AppLovin APP.O and mechanical and electrical construction services firm Emcor EME.N. They will replace bond trading platform MarketAxess MKTX.O and solar inverter maker Enphase Energy ENPH.O, respectively.

Inclusion in the S&P 500 typically boosts a company's stock price as passive funds and exchange-traded funds tracking the benchmark are forced to buy in, creating a demand surge.

Analysts also view it as a sign of financial stability and broader market credibility, prompting increased interest from institutional investors.

The changes will be effective before market open on September 22.

Shares of Robinhood rose 7.3% in extended trading. While AppLovin climbed 7%, Emcor gained 2.2%.

Robinhood shares have more than doubled this year, giving the company a market capitalization of roughly $91.5 billion, according to data compiled by LSEG.

In May, crypto exchange Coinbase COIN.O became the first digital asset firm to join the benchmark S&P 500, adding fresh legitimacy to the U.S. financial technology sector.