Nvidia, Tesla slammed as 'Magnificent 7' names lead market lower in Monday washout
The "Magnificent Seven" stocks were at the center of another sell-off hitting markets Monday.
Shares of Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), Apple (AAPL), and Microsoft (MSFT) all fell, with Tesla falling as much as 13% to lead the way down. Five of the seven megacap names saw drops of over 4%; Apple and Nvidia both lost more than 5% at session lows.
The selling pressure hitting the Magnificent Seven comes after US markets suffered their worst week of the year as the tech-heavy Nasdaq Composite (^IXIC) fell into correction last Thursday — defined as a 10% decline from its most recent closing high — and the S&P 500 (^GSPC) enters the week 6% off its record high reached on Feb. 19.
Last week, Nvidia stock lost $1 trillion from its record highs reached last year, while losses on Tesla stock are nearing 50% from its record close back in December. Nvidia has been the biggest winner from the AI boom that kicked off in 2023, while Tesla's stock — which has ebbed and flowed throughout the company's history — was an initial winner following President Trump's election win after CEO Elon Musk became one of Trump's biggest backers on the campaign trail. Musk is now leading Trump's government efficiency push.
Read more: How does Nvidia make money?
In a note to clients published late Sunday, RBC's equity strategy team, led by Lori Calvasina, wrote that "investor, corporate, and political vibes have continued to weaken."
"We continue to believe that the risk of a growth scare (14-20% drawdown peak to trough) in the S&P 500 has risen," she wrote.
Mike Wilson, strategist at Morgan Stanley, said he sees the S&P 500 falling another 5% in a client note this weekend.
Earlier this month, strategists at Bank of America flagged the risk of a post-election "bro bubble" popping and argued that should the S&P 500 erase its post-election gains, "investors currently long risk would very much expect and need some verbal support for markets from policymakers."
Speaking to reporters last Thursday, President Trump said, "I'm not even looking at the stock market," an approach that is in contrast to his first term in office, when Trump embraced the stock market as a scorecard for the administration's economic policy. Amid ongoing pressures from his burgeoning trade war, Trump on Sunday declined to rule out the possibility of a recession this year, saying the economy was in a period of "transition."
