Quick Bites | Mag 7 becomes Fab 4

The Magnificent Seven trade is beginning to fizzle – and yet, the US stock market is still heading higher. The S&P 500 climbed 10% in the first quarter, its best start to a year since 2019, even though two of its biggest constituents suffered double-digit declines. Apple fell -11% in the first three months of the year, while Tesla dropped almost 30%. Alphabet shares sputtered for much of the period before making a run in the past three weeks and ending up 8%.

The other four big tech stocks in the group known as the Magnificent Seven – Nvidia, Meta Platforms, Microsoft, and Amazon – continued their meteoric run and outpaced the broader market. Some market strategists have dubbed them the new Fab Four.

Source: Axios 

 

Some investors say it is a bullish signal that the market is still rallying without the likes of Apple and Tesla because it means other groups are taking part. All of the S&P 500’s sectors, except real estate, logged gains in the first quarter. Small caps, industrial and financial-services stocks are among those that jumped, fueling bets that the broader market might have more room to run.

Much of the enthusiasm is tied to hopes that the economy has escaped a deep recession and that the US Federal Reserve will soon pivot to cutting interest rates, even if not at the pace some investors had previously hoped. A frenzy over the future of artificial intelligence has added to the excitement.

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