{"id":5663,"date":"2023-10-26T15:53:41","date_gmt":"2023-10-26T15:53:41","guid":{"rendered":"https:\/\/infundpros.com\/markets\/sp-500-dips-to-5-month-low-as-earnings-season-highlights-struggles-of-magnificent-7-tech-stocks-to-keep-rally-afloat\/"},"modified":"2023-10-26T15:53:42","modified_gmt":"2023-10-26T15:53:42","slug":"sp-500-dips-to-5-month-low-as-earnings-season-highlights-struggles-of-magnificent-7-tech-stocks-to-keep-rally-afloat","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=5663","title":{"rendered":"S&#038;P 500 Dips To 5-Month Low As Earnings Season Highlights Struggles Of \u2018Magnificent 7\u2019 Tech Stocks To Keep Rally Afloat"},"content":{"rendered":"<div>\n<h2 class=\"topline-heading\">Topline<\/h2>\n<p>Major stock indexes slipped to their lowest levels since May this week as the largest technology companies struggle to hold up the broader market\u2019s gains, an issue on full display amidst the ongoing third-quarter earnings season.<strong> <\/strong><\/p>\n<h2>Key Facts<\/h2>\n<div class=\"key-facts\">\n<div class=\"key-facts-element\">\n<p>The S&amp;P 500 and tech-heavy Nasdaq closed Wednesday at their lowest levels since May, dipping a further 0.5% and 0.9%, respectively, by 10:30 a.m. EDT Thursday.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>The S&amp;P is now 9% below its July peak, just shy of 10% correction territory, and the Nasdaq is 11% lower than its July high.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>The breakdown comes as the \u201cmagnificent seven\u201d massive tech stocks\u2014Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla\u2014fail to support the broader 2023 rally, with those seven stocks down an average of 11% since July 31.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>That group\u2019s inability to hold up the market is on full display as a stream of firms report earnings: The seven tech behemoths are projected to grow profits 33.1% and revenue 10.9% year-over-year, according to research published Thursday by Bernstein quantitative<strong> <\/strong>analyst Ann Larson, dwarfing the 493 remaining S&amp;P companies\u2019 8.6% profit contraction and 0.3% sales growth.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad>\n <\/div>\n<div class=\"key-facts-element\">\n<p>As a result of the limited breadth of growth, the S&amp;P as a whole is forecasted to report a 3.1% dip in third-quarter profits and a 1.5% expansion in sales.<\/p>\n<\/p><\/div>\n<div class=\"key-facts-element\">\n<p>Among the 29% of all S&amp;P companies who reported earnings through Tuesday, Q3 profits are up 2.6% and sales are up 1.2% year-over-year, according to LSEG data, largely propped up by Alphabet, Microsoft, Meta and Tesla\u2019s average Q3 profit and revenue gains of 4% and 9%, respectively.<\/p>\n<\/p><\/div>\n<\/div>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Crucial Quote<\/h2>\n<p><strong>\u201c<\/strong>Earnings are not providing the proverbial \u2018ray of sunshine\u2019 they did in Q1 or Q2,\u201d Sevens Report analyst Tom Essaye wrote to clients Thursday. This earnings season \u201chas not been good\u201d and \u201chint at a potentially slowing economy,\u201d Essaye noted.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Key Background<\/h2>\n<p>The S&amp;P surged nearly 30% and the Nasdaq spiked almost 40% from its October 2022 low to its summer highs thanks almost entirely to a surge in the valuations of the most valuable tech stocks, earning the group the \u201cmagnificent seven\u201d nickname as bulls hitched their wagons to the firms at the forefront of the artificial intelligence revolution. Some strategists pointed to the narrowness of the gains as a worrisome sign, and ultimately the speed bump for big tech did cause the broader market to cede much of its gains.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Surprising Fact<\/h2>\n<p>Despite the slowdown in earnings growth outside of big tech, companies have actually been topping analyst estimates across the board this quarter; 80% of reporting firms have topped profit estimates for Q3 through Tuesday, above the 67% historic rate, according to LSEG, indicative of companies setting a lower hurdle amid a shakier macroeconomic environment.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">What To Watch For<\/h2>\n<p>A trio of the magnificent seven have yet to report Q3 earnings. Amazon will report Thursday afternoon, Apple on Thursday and Nvidia on November 21.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\"><\/h2>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/dereksaul\/2023\/10\/26\/sp-500-dips-to-5-month-low-as-earnings-season-highlights-struggles-of-magnificent-7-tech-stocks-to-keep-rally-afloat\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Topline Major stock indexes slipped to their lowest levels since May this week as the largest technology companies struggle to hold up&#8230;<\/p>\n","protected":false},"author":1,"featured_media":5664,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-5663","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>S&amp;P 500 Dips To 5-Month Low As Earnings Season Highlights Struggles Of \u2018Magnificent 7\u2019 Tech Stocks To Keep Rally Afloat | inFundPros<\/title>\n<meta name=\"description\" content=\"Topline Major stock indexes slipped to their lowest levels since May this week as the largest technology companies struggle to hold up the broader\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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