The Downfall of The Magnificent Seven
As the U.S. stock market slid in recent weeks, the so-called "Magnificent Seven" - a group of the most valuable and most influential tech companies - found themselves in unfamiliar territory. While Apple, Nvidia and the other Mag 7 are used to being market movers in the positive sense, this time around they are among the loss leaders, dragging the S&P 500 down with them due to their outsized weight in the market cap-weighted index.
While the S&P 500 only briefly slid into correction territory last Thursday before recovering on Friday, the Magnificent Seven have been in correcton territory for a while and remain there for the time being. As our chart shows, all of the seven tech giants closed last week at least 14.5 percent below their most recent three-month high, with Microsoft the least affected by the recent sell-off and Tesla at the other end of the scale.
The electric car maker saw its share price nearly cut in half since December 17, as the role of CEO Elon Musk in the Trump administration has brought the brand into disrepute, especially overseas. That effect, along with growing competition from legacy car brands and Chinese manufacturers has led many investors to drop Tesla shares like hot potatoes, resulting in Musk reportedly losing more than $100 billion as Tesla's largest shareholder.