The S&P 500 is on track for a second straight weekly decline as inflation worries, high oil prices, and rising Treasury yields weigh on stocks. The Magnificent Seven are cushioning the drop, with the Roundhill Magnificent Seven ETF closing in on its all-time high.
The S&P 500 is down 0.3% week-to-date through Thursday's close, putting the benchmark on pace for its second consecutive weekly decline. Without the Magnificent Seven, the pullback would be far steeper.
Mag 7 ETF nears record high
The Roundhill Magnificent Seven ETF (MAGS) — which holds Nvidia, Meta, Microsoft, Tesla, Alphabet, Apple, and Amazon — is up more than 1% this week, putting it on track for a fourth straight winning week. The move brings the fund near its all-time closing high of $70.94, set last May.
Wolfe Research strategist Rob Ginsberg pointed to the setup, asking: According to CNBC: "Time for the Mag 7 to break out? … It sure looks that way." MAGS closed Thursday's session at $70.78, about 0.5% below its intraday record of $71.16, also reached in May.
All seven Magnificent Seven companies carry market caps above $1 trillion, and most are seen as major beneficiaries of the artificial intelligence buildout. The rally may reflect investors rotating into higher-quality names as macroeconomic pressure persists.
Bank of America flags peaking conditions
However, Bank of America strategist Jared Woodard warned that positioning, profitability, and policy — the "3Ps" — are all peaking. He said positioning remains too bullish, citing cash flows, fund manager survey data, and the bank's Bull & Bear indicator, which is flashing a sell signal. Woodard added that profits are likely to moderate in 2027.
He also said the economy's "run it hot" policy stance is over, noting the Federal Reserve raised rates this week while Chairman Kevin Warsh highlighted near-term inflation risks. As a result, Woodard said it isn't yet time for defensive stocks, but that quality, value, and yield look prudent for stock and sector selection.
Source: CNBC
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