Tuesday’s stock market sell-off had a familiar flavor to the market action seen so far this year.
Six of the “Magnificent Seven” stocks — shares of Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) — all underperformed the S&P 500’s (^GSPC) roughly 1% decline.
The disparity marked the continuation of a trend seen throughout 2025. After two years of leading stocks’ rallies, the market’s largest technology companies are now leading the major indexes lower. With just two weeks left in the quarter, the Magnificent Seven are tracking for the worst performance against the S&P 500 since the fourth quarter of 2022.
On Tuesday, Meta became the last of the group to turn negative on a year-to-date basis, as a brutal last month has it down around 0.5% in 2025. Nvidia, Apple, and Google are all down over 14% so far this year, while Tesla’s extraordinary sell-off has seen shares shed more than 44% of their value.
Last week, Goldman Sachs chief US equity strategist David Kostin revised his year-end S&P 500 target lower from 6,500 to 6,200. Within his note announcing the change, Kostin described the “Magnificent Seven’s” shift to the “Maleficent Seven” as a reason the S&P 500 has struggled thus far this year.
As of March 11, Kostin noted that over half of the S&P 500’s drawdown could be credited to the decline seen in the seven market leaders, a stark contrast from 2024, when more than half of the market’s gains came from those same stocks.
The crash in the most popular trade of the past two years comes as investors have been rerating their growth expectations. Fears of slowing economic growth and the impact of President Trump’s tariff policies have weighed on markets as a whole. Meanwhile, Big Tech has faced growing investor criticism about its ballooning AI spend and whether or not it will eventually turn into future profits. The year also included a massive drawdown in some large tech names, including Nvidia, following the release of a cheaper AI model from Chinese company DeepSeek.
The issue for the S&P 500 is that if large-cap tech stocks are falling more than the other 493 stocks, the Magnificent Seven’s outsized market cap weighting will bring the rest of the index down with it. The combination of stocks makes up about 30% of the S&P 500’s market cap, not far off the group’s mid-30% peak weighting seen in 2024.
Over the past month, the equal-weighted S&P 500 (^SPXEW), which isn’t as overly influenced by significant swings in large stocks — has outperformed the market cap-weighted index (^GSPC) by 4 percentage points, also reflecting how much of the recent selling action has come in the market’s largest names.
