Nike Faces Pressure to Stay in Dow Jones Amid S&P 100 Removal

Nike is facing pressure to remain in the Dow Jones Industrial Average after being removed from the S&P 100 index. The sportswear company has been a part of the S&P 100 for 18 years but will be dropped at the start of trading on Sept. 21, due to its roughly 80% decline in market value over the past five years.

Nike's shares have only gained around 5% since joining the Dow in 2013, while the S&P 500 has more than quadrupled over the same period. Its recent share price of $36 makes it the lowest-priced stock among the 30 Dow components and the index's smallest component by price weight.

The Dow Jones Index assigns weights based on share prices, giving higher-priced stocks a greater impact on the index's movements. Josh Bischoff, partner and head of trading at TimesSquare Capital Management, notes that Nike appears historically to be a candidate for removal due to its small weighting in the index, accounting for around 0.4%.

Shai Bolour, chief market strategist at Futurum Equities, believes the odds of Nike being removed appear considerably higher over the next year, but notes that the process is not automatic and depends on various factors, including disparities in share prices among Dow components.