Lululemon shares hit 2-year high on S&P 500 inclusion

The news: Lululemon Athletica's shares hit an almost two-year high overnight following the addition of the Canadian sportswear maker to the Wall Street benchmark S&P 500 index.

The numbers: Lululemon shares closed more than 10% higher at USD416.64, their highest level since December 2021. The stock is now up nearly 30% year-to-date, giving the company a market capitalisation of more than USD52 billion ($82 billion).

The context: Lululemon will replace videogame publisher Activision Blizzard in the S&P 500 index, effective before the US market open on 18 October. Inclusion of a company into the S&P 500 usually causes demand for its shares to jump as mutual fund managers and other institutional investors tracking the index begin adding the stock to their portfolios. The fitness wear giant had lifted its profit and revenue forecast for a second time in August, citing an improvement in its North American business.