SpaceX is set to join the Nasdaq-100 index on Tuesday, impacting funds that track the benchmark tech index. Mutual and exchange-traded funds managing approximately $800 billion in assets will purchase SpaceX shares to maintain their performance alignment with the index.

The inclusion follows new Nasdaq rules designed to incorporate large, newly public companies more rapidly. Despite SpaceX's significant $2.1 trillion market capitalization, its weighting in the index will be relatively small due to its limited public float. The company sold less than 5% of its shares in its recent offering, and lockup agreements further restrict immediate trading.

Nasdaq employs a free-float adjustment for index weighting. This mechanism means SpaceX will initially be treated as a $300 billion company, resulting in an index weight of under 1%. This limited initial exposure means investors in Nasdaq-100 tracking funds will see a modest impact from the inclusion, despite the company's overall valuation.