Magnificent 7 - Huge fall, we know why !
By refusing to rule out that US could slipped into a recession, Trump has effectively set US economy on a collision course with recession.
Coupled with previous week's steep selloff resuming & gathering momentum (like a tropical storm) as the trading session progressed, all three major U.S. indexes suffering sharp declines.
This is as per my Sunday post dated 09 Mar 2025 (click here ! for details, Repost to share) has highlighted - the US govt is engineering a recession.
Certainly, looks like there’s more than an ounce of truth in the MarketWatch post afterall.
By closing time:
Volume on US exchanges was 18.77 billion shares, far exceeded the 16.42 billion average for the full session over the last 20 trading days.
DJIA:
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-2.08% (-890.01 to 41,911.71).
S&P 500:
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-2.69% (-155.63 to 5,614.56).
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It posted 25 new 52-week highs and 17 new lows
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It is coming off of its biggest weekly percentage drop since September 2024.
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Index closed below its 200-day moving average, for the first time since November 2023.
Nasdaq:
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-4.00% (-727.90 to 17,468.32).
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Tech index recorded 32 new highs and 290 new lows.
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Index dipped more than -10% below its record closing high touched on 9 Dec 2025, confirming that it has been in a correction since then.
Top 3 Worst Sectors.
Among the 11 major sectors of the S&P 500, the 3 worst on Monday were: (see above)
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Technology (XLK), falling by -4.25%.
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Consumer discretionary (XLY), falling by -3.57%.
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Comm services (XLC), falling by -2.49%.
Other Catalysts In The Play.
As if the tariffs woes are not enough, there are other catalysts at play this week that may further weaken market sentiments, especially the last catalyst:
(a) Counter-retaliation full swing.
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China's retaliatory tariffs on select US imports are set to take effect on Mon, 10 Mar 2025.
(b) Further escalation.
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US tariffs on certain base metals are anticipated later in the week.
(c) Cheap credit.
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Tech stocks experienced a downturn (a) due to a strengthening Japanese yen and (b) rising government bond yields.
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Investors are reversing "carry trades" - a practice where they borrowed low-cost yen to invest in higher-yielding assets.
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This reversal is pulling money out of tech stocks, particularly the "Magnificent 7", that had attracted significant investment from these trades.
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In essence, the financial shifts in Japan, specifically the changes in bond yields, are directly impacting the performance of the US tech market, as flow of investment reverses.
Does this imply that there’s more room for consolidation in the near term ? It is worrying !
Magnificent 7 Tumble.
Quick look at Magnificent 7’s Monday performances (in descending order) seemed to align with above analysis.
(1) $Tesla Motors(TSLA)$.
No guessing required on which Mag 7 stock has been hit the hardest, in the current maelstrom.
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It led the losses, plunging over -15.43%, effectively erasing all its post-election gains.
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The decline was driven by tariffs, economic concerns, and potential consumer backlash against Elon Musk's political activities.
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Further downside expected as these headwinds remain gale-force.
(2) $NVIDIA(NVDA)$.
Nvidia dropped around -5.07%, reflecting moderated sales and earnings growth. Its stock price harked back to 9 Sep 2024 level, less all the gains since.
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Concerns over potential US export restrictions on AI hardware to China continue to weigh on the stock.
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Its future performance could face pressure if these geopolitical risks materialize.
(3) $Apple(AAPL)$
On Monday, Apple also declined by -4.85%.
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The company faces challenges from slowing global demand and high valuation concerns, which could limit near-term upside
(4) $Meta Platforms, Inc.(META)$.
Meta fell by -4.42%, amid broader market recession fears.
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With a slowdown in earnings growth expected for Q1 2025, further declines may occur unless advertising revenue rebounds significantly.
(5) $Alphabet(GOOG)$ :
Alphabet saw a drop of -4.41%.
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While its fundamentals remain strong, decelerating growth in digital advertising may pose risks going forward.
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Not forgetting its latest headache of being “forced” by the Department of Justice to sell and spin off its Chrome browser and then some more ? (see above)
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Will Google’s CEO Sundar Pichai request “payback” from Trump for the $1 million donation to the latter’s inauguration fund back in January 2025 ?
(6) Microsoft (MSFT):
Microsoft declined approximately -3.34%.
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Despite its robust fundamentals, slower earnings growth compared to peers might weigh on its stock price in the near term.
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The last time MSFT was at the $380 level was backed on 12 Jan 2024.
(7) Amazon (AMZN):
Amazon slid about -2.36%, reflecting broader market weakness.
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Its strong cloud business could provide some resilience in the medium term.
In the near term, AI investments alone are unlikely to stop a recession if US economy keeps worsening—will Scott Bessent and Howard Lutnick still deny this reality?
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Do you think a recession assault is imminent ?
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Do you think the Magnificent 7 will dip further from this week onwards?
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