Despite the sharp declines, all but Tesla are in positive territory for the year, while Microsoft is the next of the seven to report results.
The “Magnificent Seven” suffer from poor earnings expectations: Nvidia sinks almost 7%.
The actions of the Magnificent Seven fell on Wednesday after earnings reports from Tesla (TSLA) and Alphabet (GOOGL) raised concerns on the slowdown in growth of profits of US tech giants.
Shares of the Roundhill Magnificent Seven ETF (MAGS) fell 6.1% on Wednesday, Its biggest daily decline since the ETF launched in April 2023Wednesday’s drop plunged the index into correction territory.
The tech giants, which together were worth around $16 trillion at Tuesday’s close, weighed heavily on the major indexes. Thus, on Thursday, Nvidia down 0.3%; Alphabet down almost 0.4%; Meta down 0.8%; Amazon up 0.4%; Microsoft up 1.6%; Apple up 0.2% and Tesla up 3%.
More big company results coming next week
Microsoft (MSFT) is the next of the seven to report earnings, with its report scheduled for Tuesday afternoon. Meta (META), Apple (AAPL) and Amazon (AMZN) They are also scheduled to report next week.
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The Magnificent Seven group is expected to report 30% profit growth in the second quarter, according to Bank of America analysts. This is well ahead of the 10% growth forecast for the S&P 500 as a whole.but it would be the second consecutive quarter of slowing growth for the group.
Even before Wednesday’s plunge, large-cap technology names, which had driven broader market gains all year, had begun to lose favor as investors rotated into stocks of smaller companies that would benefit more from anticipated rate cuts by the Federal Reserve.
Despite recent sharp declines, all but one of the Magnificent Seven stocks are in positive territory for the year, with Tesla being the exception.
Source: Ambito
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