Now that SpaceX has completed what became one of the largest IPOs in history, one thing is clear: the alarms were not hypothetical. Several major index providers, including Nasdaq and FTSE Russell, accelerated its path into broadly-used indices, and markets have spent the weeks since grappling with the consequences.

In the run-up, I was getting emailed articles with headlines like “Experts sound alarm over Elon Musk's 'coup' that's 'about to rob your 401k',” and everyone wanted to know: would Sphere do the same? Would the Sphere 500 Fossil-Free Index fast-track adoption of SpaceX the same way Nasdaq implemented its “fast entry” rule allowing mega-cap IPOs to enter the Nasdaq-100 within 15 trading days, as S&P Dow Jones considered shorting traditional waiting periods for companies like SpaceX? 

The answer is no, but not because we don’t believe in fast-tracking. We are excluding SpaceX because our nonprofit data partner As You Sow defines them as a military weapons company, and we do not include weapons companies in our index.

No index is neutral

Recent coverage of the SpaceX IPO has made one thing unusually visible: indexing is not passive. Major outlets are now openly discussing how index providers are actively redesigning rules to accommodate mega-IPOs like SpaceX. Nasdaq shortened its inclusion window from months to days. S&P Dow Jones Indices considered reducing its 12-month seasoning requirement and waived profitability criteria, though in the end it did not. These changes would force trillions of dollars in funds that track these indices to buy newly listed companies almost immediately and at inflated prices. 

What these debates unveiled was that no index is neutral or unbiased. Active decisions must always be made, and in a world in which index funds have become the norm, those decisions shape the stock market.

The S&P 500 Index managers have a committee that meets quarterly to decide whether to let companies onto its list. At Sphere we don’t do that. We start with a list of the top 500 companies by market capitalization, and we don’t arbitrate whether a company deserves to be on that list, nor do we start with the S&P 500’s arbitrated list. We take the top 500 as they are. 

Sphere’s nonprofit data partner, As You Sow, classifies SpaceX as a military weapons company. Under our methodology, companies classified in military weapons are systematically excluded.

Sphere 500 vs. S&P 500: two definitions of “the market”

The difference between the Sphere 500 and traditional benchmarks is not technical—it is ethical. The S&P 500 aims to reflect the market as it is. The Sphere 500 aims to reflect the market as it should be for a climate-safe future. That means not investing in fossil fuel companies, lead contributors to deforestation, weapons companies, private prison operators, or tobacco companies.

Where traditional indexes are asking “How fast can we include SpaceX?” Sphere asks “Should this company be included at all?” SpaceX has significant government and defense-linked operations, and under As You Sow’s definition, that places it within the military weapons category. The United States military is the planet’s single biggest institutional emitter of greenhouse gasses. There is no climate-safe future without a significant reckoning with how the US uses military power in the world. 

As mega-cap private companies come to market—often with deep ties to defense, surveillance, or advanced weapons systems—this question will not go away. Sphere applies consistent screens, even when it means excluding the largest IPO in history

Responding to the “fast-track” narrative

The narrative around SpaceX is that exclusion from major indexes would be an anomaly. That framing is backwards. What is actually unprecedented is changing index rules in advance of a specific IPO, potentially forcing passive investors to buy into price discovery phases. Historically, companies like Amazon waited years before entering the S&P 500. Now, index providers consider inclusion within weeks or months. That is not neutral. It is active design.

The SpaceX IPO is not just about one company. It is about how people decide: What counts as “the market”? Are values-based screens are optional or foundational? The Sphere 500 Index makes that decision explicit. If a company is classified as a military weapons company,
it does not enter the index, regardless of size, demand, or narrative.

SpaceX may be fast-tracked into major indexes. It will not be included in the Sphere 500 Fossil-Free Index.