The U.S. equity market, as represented by the Russell 3000, increased 51.9% over the year ended May 7, with the market capitalization of constituent companies hitting $47.7 trillion.
The increase — evident in the latest rebalancing of FTSE Russell's U.S. indexes, which took effect after the close of trading on June 25 — "reflects a year of recovery in the markets," Catherine Yoshimoto, director of product management, said in a telephone interview. "The recovery was across the board, but especially for small-cap and value" stocks.
Four companies surpassed the $1 trillion market capitalization mark, up from three last year, with Alphabet Inc. joining Apple Inc., Microsoft Inc. and Amazon.com.
Tesla Inc. and J.P. Morgan Chase entered the top 10 companies by market capitalization, replacing Proctor & Gamble Co. and Walmart Inc. The top 10 companies had a total market capitalization of $10.9 trillion, up 53% vs. 2020, and representing almost one-quarter of the total market capitalization of the Russell 1000 and 22.9% of the Russell 3000.
The Russell 1000 market capitalization was up 49.5% over the year to $44.1 trillion, with 56 companies added to the index — the majority of which were upgraded from the Russell 2000 index. However, 26 companies joined as new additions to the Russell U.S. indexes universe, including alternatives manager Blackstone Group.
The breakpoint between large- and small-cap stocks — the difference between the smallest company in the Russell 1000 index and the largest in the Russell 2000 index — also increased, to $5.2 billion from $3 billion last year.
The total market capitalization of Russell 2000 companies increased 84.2% over the year to $3.5 trillion.
While 271 companies joined the Russell 2000 index, 323 left the index for various reasons, including moving up into the Russell 1000, with seven companies dropping out of the Russell U.S. indexes universe altogether.
Ms. Yoshimoto said about $10.6 trillion in assets are benchmarked against the Russell indexes, about $1.9 trillion of which is invested in passive strategies.