The Standard & Poor's 500 Index includes big companies. Only big companies.

To become a component of the index, a company must have a minimum market capitalization of $18 billion. Plus, of course, the company must be a U.S.-based company and listed on a primary exchange. Which means New York, Amex and Nasdaq.

S&P Dow Jones Indexes, the organization that manages the S&P 500 adjusts its market cap requirements for the index as well as those for the S&P MidCap 400 and S&P SmallCap indexes once or twice a year.

The S&P 500's market cap has mostly been rising in the 21st century.

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The minimums were cut twice during the 2008-2009 financial crisis.

The S&P 500 threshold moved higher again, starting in December 2009, rising steadily until January 2023, when it was cut to $12.7 billion from $14.6 billion. That was as the Federal Reserve was boosting interest rates to beat down inflation. (Stocks did not handle high rates well.)

So, with the $18 billion threshold in place, S&P Dow Jones announced Friday it is adding three stocks to the S&P 500 and replacing three others.

The changes take effect before trading opens on Sept. 23.

The nominees are stocks loved by investors

Palantir is up nearly 77% this year. The company, co-founded by Paypal ( PYPL ) co-founder Peter Thiel, is known for its expertise in big data analytics, including activities such as monitoring terrorist activities and government fraud and helping big corporations analyze economic, political and government trends.

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It has had controversies, including potential illegal surveilling. The market cap is $68 billion.

The company has a huge Stanford connection. Six of seven directors — including CEO Alexander Karp and Thiel, the board chair — hold degrees from the school.

Dell is more than Dell the PC maker. Thanks in part to 2016's $50-billion acquisition of EMC, the software and storage company, Dell markets high-end servers for use in artificial intelligence applications, robots, computer security and information security. The market cap is $78 billion, and the shares are up 33% in 2024.

Erie Indemnity is the surprise of the trio and the smallest by far. But the company, founded in 1925, is a very profitable insurance company offering property casualty, auto and life policies in 12 states. The shares are up 47.6% in 2024, and the market cap is $26.5 billion.

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A well-known stock among the S&P 500 departees

The best known is American Airlines Group ( AAL ) , parent of American Airlines. It is the world's largest airline as measured by number of passengers carried, by fleet size and by scheduled passenger-kilometers flown. Airlines are still recovering from the damage from the Covid-19 pandemic. And American's stock price is down 21% this year (after just an 8% gain in 2023). It's also off 33% from its 52-week high. Its market cap is about $7 billion. The market cap of Delta Air Lines ( DAL ) is $27.1 billion, and its shares are up 4.4% this year.

Related: Analysts revise Dell stock price target ahead of earnings

After American's departure, the index will still include three airlines: Southwest Airlines ( LUV ) , United Airlines ( UAL ) and Delta.

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Etsy ( ETSY ) , operator of online marketplaces, best known for popularity among people interested in crafts. The stock soared during the Covid-19 pandemic, reaching nearly $300 in November 2021. The stock finished Friday at $53.19, down 46.7% on the year.

Bio-Rad Laboratories ( BIO ) , which makes specialized technological products for the life science research and clinical diagnostics markets. Shares of the Hercules, Calif.-based company reached $825.77 in September 2021. Their price has fallen fallen to $329.75 but is up 2.1% on the year.

American will replace broadcaster Tegna ( TGNA ) in the S&P Midcap 400 Index. Tegna moves to the small cap index. Bio-Rad replaces Erie Indemnity in the Midcap Index. Etsy replaces Haverty Furniture Companies ( HVT ) in the S&P Small-Cap index.

There are many more moves by S&P. Check them out here .

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