Is the Magnificent Seven No More?

WDC NEWS 6 STAFF 18 hours ago

1 2 minutes read

Key Takeaways

Meta Platforms on Tuesday became the last of the Magnificent Seven stocks to fall into negative territory for the year.
The seven tech giants whose stocks powered the market’s gains throughout 2023 and 2024 have weighed on the market this year amid growing economic uncertainty.
The equal-weighted S&P 500 still hadn’t entered a technical correction at close Wednesday.

The Magnificent Seven aren’t looking so magnificent this year.

Meta Platforms (META) this week became the last of the group of Big Tech stocks to slip into negative territory for the year. The remainder—Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), Alphabet (GOOG), Amazon (AMZN), and Tesla (TSLA)—are down between 8% and 42% at Wednesday’s close since the start of the year.

The Magnificent Seven stocks have been in the driver’s seat of the U.S. stock market since the end of 2022 when cooling inflation and the explosive popularity of OpenAI’s ChatGPT sparked the AI rally that minted the concept of the Mag Seven. The tech giants accounted for more than 50% of the S&P 500’s gains in 2023 and 2024. The index rose more than 20% in each of those years, its first such streak since the 1990s.

Some market watchers have been warning for a while that the narrow bull market was an unsustainable one, and there’s evidence that the Mag Seven’s dominance has come back to haunt the stock market this year. The Mag Seven stocks are down nearly 15% since the start of the year, while the S&P 500 is down about 4%, and the equal-weighted S&P 500 is down less than 1%.

Mag Seven Dropped Into Correction Last Month

The Mag Seven officially fell into a correction at the end of February, weeks before the S&P 500 did last week. The equal-weight index, meanwhile, still hadn’t fallen into a correction at Wednesday’s close.

“So when we think about the US market falls this year I would say sentiment changes towards the Mag-7 are a bigger impact domestically than the trade headlines even if both matter,” wrote Deutsche Bank analyst Jim Reid in a note on Wednesday.

The Magnificent Seven stocks have been hit particularly hard this year by mounting uncertainty on Wall Street and Main Street. The release of a surprisingly efficient open-source AI model from Chinese startup DeepSeek prompted a sell-off in late January. The group has struggled to bounce back amid growing uncertainty about the economic impact of President Donald Trump’s tariffs.

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