Market Monday

Why the Magnificent Seven Just Broke Formation

This Week's Discussion

The market didn’t move much last week… but what happened underneath tells a very different story. For the past three years, the S&P 500 has largely moved as a single block, driven by the Magnificent Seven and a shared narrative around artificial intelligence and cloud growth. That pattern may be starting to break.

Key Topics Covered

  • Why the “Magnificent Seven” have moved together
  • What changed during last week’s major earnings releases
  • Why similar results led to very different stock reactions
  • What the Federal Reserve and geopolitical events are signaling
  • And what this shift could mean for portfolios going forward When markets move in lockstep, indexing works well. When dispersion returns, investment selection starts to matter more.

S&P 500 Earnings With and Without The Magnificent Seven

The AI frenzy is being reflected in analysts’ expectations for double-digit earnings growth for S&P 500 companies overall both this year and next. The Magnificent Seven has been responsible for more than half of S&P 500 earnings growth the past few quarters and will likely continue to play a significant role in growing earnings in 2026. While the wide gap between the Magnificent Seven’s earnings growth and the rest of the market will likely persist well into 2026, supporting large cap growth stocks, expect this gap to narrow as the year progresses. This is something to watch closely when the calendar turns, as it could spark a market rotation into value stocks.
Source: LPL Research, Bloomberg, Company Reports, 12/01/25 Disclosures: Past performance is no guarantee of future results. Estimates may not materialize as predicted and are subject to change. Magnificent Seven includes Alphabet (GOOG/L), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA).

Important Disclosures

The opinions expressed are those of CollaborativeWEALTH® and are for general information only. They are not intended to provide specific advice or recommendations for any individual or to offer or solicit investment services via YouTube.

 

Investment Advisory and Financial Planning services are provided through CollaborativeWEALTH, an SEC Registered Investment Advisor.

 

Any cryptocurrency and ETF references in this content are not endorsements and are provided for illustrative or educational purposes only.

 

To determine which investments may be appropriate for you, consult with your attorney, accountant, and financial advisor or tax advisor prior to investing.

 

Investment Advice and Financial Planning Services Offered Through CollaborativeWEALTH® – An SEC Registered Investment Advisor

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