Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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On the 21st of September 2026, Nike will be kicked out of the S&P 100 after an 18-year stint, following a disastrous streak on the New York Stock Exchange.
The famous shoemaker, founded in Oregon back in 1964, first went public in 1980 under the ticker NKE. Years of consistent growth would eventually see the company invited into the esteemed S&P 100 club in the year 2008. Unfortunately, in just two short weeks, its membership within the prestigious index will come to an end.
The S&P 100, which actually includes 101 companies because of Google being difficult (GOOG & GOOGL), is a hand-selected index of the most established companies within the wider S&P 500. Far from simply grouping the 100 largest companies by market cap, the S&P 100 accounts for sector balance and financial durability. This ensures that the index represents a broader spectrum of the stock market overall, while remaining somewhat stable over time.
The committee responsible for such decisions rebalances the index four times per year and will typically swap out no more than 1-2 companies per quarter. The current round is an outlier in that four different names are facing the chop: Nike (NKE), Colgate-Palmolive (CL), Honeywell Aerospace (HONA), and Simon Property Group (SPG), to be replaced by Dell Technologies (DELL), Palo Alto Networks (PANW), Arista Networks (ANET), and SanDisk (SNDK). A rotation of eight different companies certainly makes the September rebalancing operation one of the more impactful in recent times, but the demotion of Nike adds an element of nostalgia to the event.
Nike’s catastrophic performance on Wall Street over the past few years has forced the committee to reevaluate the company’s position within the index. The chart speaks for itself: from a high of $179 per share in November 2021 to a 12-year low of $38 as of yesterday evening – a 78% drop that has erased $200 billion in market capitalisation.
So why has NKE fallen so precipitously? There are a few different answers, but the main point that sticks out is the company’s attempt to pivot away from retail floor space to prioritise its digital stores. With Nike gone from many shelves, competitors quickly seized the empty space and filled the vacant aisles with their own products. As the Covid lockdowns wound down around the world, consumers returned to physical shops only to find that Nike was conspicuously absent. To make matters worse, the innovation gap between Nike and its rivals has continued to widen, gradually weakening the competitive moat that the company previously enjoyed.
Another major culprit is the downturn in the Chinese market, which saw revenue fall by 30% between 2021 and 2026. Rather than rely on local marketing teams to properly gauge sentiment within the target audience, Nike maintained a centrally controlled decision-making structure, which utterly failed to resonate with Chinese consumers. Other comparable brands avoided the same fate thanks to more flexible approaches, which resulted in more widely received merchandise.
The third, and more controversial, reason is that the brand may have focused too narrowly on certain demographics, putting off large swathes of the general population in the process. Targeted advertisement campaigns over the last decade did not sit well with large parts of the public, splitting different groups along political and cultural lines and alienating formerly loyal consumer bases.
For a company that makes shoes and other sports apparel, brand image is everything. Shunning the majority was a controversial strategy that the current management openly admits was a mistake. Former CEO Elliott Hill retired from Nike in 2020, but the 32-year veteran at the company was brought back out of retirement in 2024 to address many of the problems discussed above. The new management freely acknowledge that the previous attempt at demographic sorting damaged the brand and is currently attempting to reorient the company back to its roots; a process that may take many years to see through to fruition.
It is worth looking again at the companies being welcomed into the S&P 100 index: Dell, Palo Alto, Arista and SanDisk. All four are tech companies. All four are intimately connected to the AI sector. Nike’s symbolic fall from grace distracts from a potentially more interesting facet of the story: that US markets are increasingly dominated by the tech sector. Information technology alone now accounts for 44% of the S&P 100 index by market cap weight. For the S&P 500, the figure falls only slightly to 38%. For context, in 1990, the figure was roughly 7%.
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