The S&P 500’s Magnificent Seven stocks face a costly August sell-off
The once-magnificent S&P 500 stocks, including Apple, Microsoft, and Nvidia, are facing a costly sell-off in August. These stocks have seen their collective market value drop by a staggering $632 billion, according to an analysis by Investor’s Business Daily. This significant decrease in value accounts for more than 50% of the overall market value loss of the S&P 500 during the month.
Market value of Magnificent Seven stocks drops $632 billion in August
The market value of the Magnificent Seven stocks has plummeted by $632 billion in August alone. This includes notable companies such as Apple, Microsoft, and Nvidia. The drop in value comes as no surprise to analysts who had warned that these stocks were overvalued. As a result, investors who heavily invested in these stocks are now experiencing significant losses.
Role reversal: Magnificent Seven now driving losses, not gains
In a surprising turn of events, the Magnificent Seven stocks are now driving losses instead of gains. Previously, these stocks were known for their strong performance and ability to generate substantial returns. However, in August, five of the seven stocks were responsible for the largest drops in market value within the S&P 500. For instance, Apple’s market value alone plunged by $315 billion, accounting for 31% of the S&P 500’s loss during the month. As investors continue to question the high market premiums and declining profits of these stocks, their fortunes have taken a swift and unexpected turn.
Not all Magnificent Seven stocks suffer in August sell-off
While the majority of the Magnificent Seven stocks are experiencing losses in the August sell-off, there are a few exceptions. Amazon.com, for instance, has seen its stock value increase by more than 5% this month. The online retail giant’s market value has also grown by $76.9 billion. Analysts attribute this positive performance to increasing bullishness regarding Amazon’s future earnings. Forecasts for the company’s earnings have been revised upwards, outperforming those of other Magnificent Seven stocks.
Can U.S. Big Tech drive the S&P higher despite August setback?
Despite the setbacks faced by the Magnificent Seven stocks in August, many are optimistic about the future of U.S. Big Tech and its potential to drive the S&P 500 higher. Analysts believe that further upside earnings revisions and better expected earnings growth in 2024 will determine the success of these stocks. While the August sell-off has affected their market value, the Magnificent Seven stocks are still up by an average of 87% this year. The rally including a broader range of stocks is seen as a positive sign for the overall health and sustainability of the S&P 500.
The Magnificent Seven stocks within the S&P 500 are enduring a significant sell-off in August, resulting in substantial losses for investors. Despite the challenges faced by these stocks, there is optimism regarding the broader stock participation in the market, which is seen as a healthier and more sustainable bull market. As investors continue to navigate the market, the performances and future prospects of the Magnificent Seven stocks will be closely watched.
Analyst comment
Neutral news: “Market value of Magnificent Seven stocks drops $632 billion in August”
Analyst’s view: The sell-off of the Magnificent Seven stocks in August has led to significant losses for investors. However, the broader stock participation in the market indicates a healthier and more sustainable bull market. The future prospects of these stocks will be closely watched by investors.
