Apples Late-Day Stock Plunge on Rebalance Day Puzzles Market

Despite initially appearing poised for gains due to its expected increased weighting in major stock indexes, Apple shares experienced a surprising decline in the final minutes of trading on Friday. This drop, attributed to a large imbalance in market-on-close orders, has left analysts speculating about its cause. Some theorize that actively managed funds may have sold off shares, anticipating a surge in demand from index funds adjusting their holdings. Others suggest arbitrageurs, aiming to profit from index rebalancing, bought Apple shares earlier in the week, driving up the price and potentially selling off their positions before the close of trading. While the exact reason remains unclear, the incident highlights the potential impact of index adjustments and the strategies employed by various market participants.