Nvidia and Tesla are hammered as the ‘Magnificent 7’ companies lead the market down on Monday
The “Magnificent Seven” stocks were at the heart of another sell-off that hammered the US stock market on Monday. Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), Apple (AAPL), and Microsoft (MSFT) all saw share price declines, with Tesla losing 15% to lead the way. Five of the seven megacaps fell by more than 4%; only Microsoft (down 3.3%) and Amazon (down 2.3%) suffered more minor losses. The Magnificent Seven saw selling pressure following the US markets’ worst week of the year. The Nasdaq Composite (^IXIC), a tech-heavy index, plummeted 10% from its most recent closing high on Thursday.
Monday was the worst day of the year for the S&P 500 and Dow, while the Nasdaq had its steepest one-day loss since September 2022. The S&P 500 is less than 2% away from a drop, trading at its lowest since September 12, 2024. Last week, Nvidia’s stock fell $1 trillion from its record highs last year, while Tesla’s shares shed 50% of their value after December’s record close. Nvidia has been the greatest beneficiary of the AI boom that began in 2023, while Tesla’s stock, which has fluctuated throughout the company’s existence, was an early winner following President Trump’s election victory when CEO Elon Musk became one of Trump’s most vocal supporters on the campaign trail.
In a message to cInvestoreleased late Sunday, RBC’s equities strategy team, chaired by Lori Calvasina, stated, “investor, corporate, and political vibes have continued to weaken.” “We continue to believe that the risk of a growth scare in the S&P 500 has risen,” the analyst stated.
In a client letter this weekend, Morgan Stanley strategist Mike Wilson predicted that the S&P 500 will fall another 5%. Earlier this month, Bank of America strategists warned about the potential of a post-election “bro bubble” deflating, arguing that if the S&P 500 erases its post-election gains, “investors currently long risk would highly expect and need some emotional backing for markets from policymakers.” Speaking to reporters last Thursday, President Trump stated, “I’m not even looking at the stock market,” which contrasts with his first term in office when Trump used the stock market as a scorecard for the administration’s economic strategy. Amid persistent pressures from his escalating trade war, Trump refused to rule out a recession this year, saying the economy was in “transition.” This week’s inflation data, due on Wednesday, will be the most significant update for investors seeking evidence that the Federal Reserve would loosen policy more quickly than expected this year.
