Why Is Nike Stock Down? The S&P 100 Removal Explained

When a well-known stock falls a lot, a single news item often shows up trying to explain everything at once. For Nike, that news item was its removal from the S&P 100 index, announced by S&P Dow Jones Indices on September 4, 2026, effective September 21. The company remained in the S&P 500.

The problem is that an index exit doesn't explain years of decline. According to a Bloomberg Línea report from September 7, 2026, the shares were about 78% below their all-time high at the start of that month. The price confirms it: the closing record in Yahoo Finance data is $177.51, on November 5, 2021, and on September 2, 2026, the stock closed at $38.24, 78.5% lower. The reasons show up in the company's own results.

What the S&P 100 Is and Why the Exit Matters

The S&P 100 brings together about 100 large American companies chosen from within the S&P 500, based on size, liquidity, and sector representation. When a company loses market value relative to the others, it can be replaced.

The removal forces funds that track the index to sell the stock on the change date. It's a technical flow, concentrated in a few days, that says nothing about sales, margins, or profit. That's why it usually affects short-term volume and price more than the trend.

Real Example: Nike Stock in 2026

The chart shows Nike's daily price between April 1 and October 7, 2026. The stock went from $44.63, reached a high of $47.65 on May 28, and fell to a low of $31.97 on October 2, closing on October 7 at $34.36, a 23% drop over the period. Since 2025's last trading day ($63.71), the decline is 46.1%. Three moments help separate the index's effect from the rest:

From the Announcement to the Change Date

On the announcement day, September 4, the stock closed at $38.40. By September 18, the last trading day before the change, it had fallen 7.5%, to $35.51. On that day volume was 52.1 million shares, about 1.8 times the period's daily average (28.6 million), the typical pattern of funds adjusting their portfolios on the eve of a rebalancing.

After the Exit

On September 21, the first day out of the index, the stock closed at $36.10, above the previous trading day. By October 7 it had pulled back 4.8%. The forced selling flow passed, and the downtrend continued anyway.

The Biggest Volumes Came Afterward

The two highest-volume trading days of the period weren't linked to the index change: October 1, with 112.4 million shares, and October 2, with 142.7 million, when the stock opened at $32.55, well below the previous day's $35.15, and marked the window's low. The market reacts more strongly to information about the business than to an index swap.

The Underlying Reasons for the Decline

Dependence on a Few Sneaker Models

When explaining fiscal year 2025's third quarter, management acknowledged it had relied too much on classic lines, like the Air Force 1, Dunk, and Air Jordan 1, and said it would cut back the supply of those models, without discontinuing them, to make room for new products. The transition is painful: selling less of an established sneaker cuts revenue immediately, while the new launch still has to prove it can sustain a similar volume.

Rebuilding Without Relying on Discounts

Fiscal year 2026's annual report describes two fronts at once: rebuilding wholesale distribution and turning the digital channel into full-price selling. Clearing stuck inventory required discounts and returns in some areas. In the fiscal year ended May 31, 2026, in reported figures:

• Wholesale sales: up 6%.
• Nike Direct sales (own stores and digital): down 6%.
• Greater China: down 11%, with less store traffic, heavy promotions, and excess inventory.
• Converse: down 31%.

Selling more to the retailer isn't the same as the retailer selling more to the consumer: real demand still has to be confirmed at the register.

Profit Fell More Than Revenue

In fiscal year 2025, revenue fell 10%, but diluted earnings per share fell 42%, more than four times as much. The gross margin pulled back with discounts and inventory costs. Rent, staff, and marketing don't fall at the same pace as sales, and the bottom line suffers disproportionately. In fiscal year 2026, revenue stayed practically flat, and diluted earnings per share fell again, from $2.16 to $2.10.

The Margin That Needs Context

In fiscal year 2026's fourth quarter, the gross margin was 49.2%. About nine percentage points came from the expected recovery of tariffs paid under a specific American trade law, the IEEPA. Without that effect, the margin is close to 40.2%, practically the same as the 40.3% of the same quarter the year before: stable, not better.

How to Analyze a Stock's Decline

Separate Technical Events from Fundamentals

Index exits, options expirations, and rebalancings generate buying or selling flows that tend to pass within a few days. Changes in revenue, margin, and profit affect the trend for quarters.

Look at the Series of Results, Not One Quarter

A single number, like a 49.2% margin, can mislead. Comparing it with the same period the year before and stripping out one-off effects shows the real picture.

Use Volume as a Clue

Volume well above average on a known date, like the eve of an index change, suggests a technical flow. Volume spikes on dates with no technical event usually indicate new information about the company.

Limitations

None of this indicates where the stock is headed. The numbers above describe what happened and aren't a recommendation to buy or sell.

Common Mistakes When Interpreting a Stock's Decline

• Blaming the entire decline on the most recent news, like the S&P 100 exit, while ignoring years of results.
• Thinking a stock that fell 78% is cheap just because of the drop, without looking at profit and prospects.
• Celebrating a high margin without stripping out one-off effects, like a tariff recovery.
• Confusing wholesale sales with end-consumer demand.
• Ignoring volume, which helps distinguish a technical flow from a reaction to new information.

To practice, pick a stock you follow, mark the earnings dates and technical events on your demo account chart, and note the volume and price change for each one. After a few quarters, your record will show which news items actually changed the trend.

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