Super Micro Computer (NASDAQ: SMCI) stock lost substantial ground in Monday's trading. The company's share price closed out the daily session down 6.4% according to data from S&P Global Market Intelligence. Notably, the pullback happened even as the S 500 index climbed roughly 0.8%.

Supermicro stock was added to the S 500 today, replacing in the benchmark index. The move was announced on March 4, and the server specialist's stock posted explosive gains on the news. Even with today's pullback, Supermicro's share price is still up roughly 11% since it was announced that the company was being added to the index.

Being included in the S 500 index is often a bullish sign for a stock. Once a company becomes part of the S 500, investors who purchase exchange-traded funds (ETFs) that track the index will also effectively be buying shares of that company's stock. In turn, that tends to increase demand and send its share price higher. Being part of the S 500 is also a prestigious distinction, and it can bolster the appeal of a still relatively little-known company, such as Supermicro.

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Source Fool.com