The reasoning here is backwards, because the rules in their current form exclude all three of the major upcoming IPOs of civilization changing companies (spacex, anthropic, openai). These companies are all large-caps, are currently in the top 20 largest companies in the US, but the S&P 500 index which claims to be a measure of the 500 largest companies in the US will systematically exclude these. Very likely for 3-5 years and more.

How can S&P justify excluding these three companies from an index of large-cap US companies, which when combined together, consist of 5% of the total market capitalization of entire stock market of the United States?

If the rules are not changed, then the S&P 500 will exclude a significant part of the US stock large-cap market, which defeats the entire purpose of it being a benchmark index.

If the S&P 500 was only used as a benchmark as it is originally intended, there will be no debate to adjust the rules to include these companies.

Yet because today there's trillions of dollars tied up to this benchmark, inclusion and exclusion becomes a financial issue.

S&P is under immense political pressure to not adjust their index because asset managers and the general populous don't actually want passive investing.