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S&P 500 Dips To 5-Month Low As Earnings Season Highlights Struggles Of ‘Magnificent 7’ Tech Stocks To Keep Rally Afloat

Topline

Major stock indexes slipped to their lowest levels since May this week as the largest technology companies struggle to hold up the broader market’s gains, an issue on full display amidst the ongoing third-quarter earnings season.

Key Facts

The S&P 500 and tech-heavy Nasdaq closed Wednesday at their lowest levels since May, dipping a further 0.5% and 0.9%, respectively, by 10:30 a.m. EDT Thursday.

The S&P is now 9% below its July peak, just shy of 10% correction territory, and the Nasdaq is 11% lower than its July high.

The breakdown comes as the “magnificent seven” massive tech stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla—fail to support the broader 2023 rally, with those seven stocks down an average of 11% since July 31.

That group’s inability to hold up the market is on full display as a stream of firms report earnings: The seven tech behemoths are projected to grow profits 33.1% and revenue 10.9% year-over-year, according to research published Thursday by Bernstein quantitative analyst Ann Larson, dwarfing the 493 remaining S&P companies’ 8.6% profit contraction and 0.3% sales growth.

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