Enlarge (credit: Aurich Lawson vs Disney)

Tesla will finally be added to the S&P 500 Index, the committee responsible for the index announced after markets closed on Monday. The change will take effect on December 21.

Tesla’s stock price jumped 13 percent in after-hours trading on Thursday. As I write this just before noon on Tuesday, Tesla’s stock has given back some of those gains and is up about 7 percent from Thursday’s close.

People have trillions of dollars in index funds that track the S&P 500 index. This means that when a stock is added to the S&P 500, fund managers have to add it to their portfolios, pushing up the stock price.