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Market Snapshot
Can the ‘Magnificent Seven’ save a stock market that might be doomed without them?
This week’s Big Tech earnings could be what finally helps push the S&P 500 higher, says analyst
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Updated July 19, 2026, 3:06 p.m. ET
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The stock market in July has settled into an almost eerie calm on the surface. There are growing signs that might not last.
Underneath the quiet sits a live wire: the “Magnificent Seven,” nearly left for dead after a punishing first half of 2026, but quietly coming back to life in the past two weeks. That could easily jolt the sleepy S&P 500
into high gear in the coming weeks.
The Roundhill Magnificent Seven ETF
, which holds shares of Nvidia Corp.
, Apple Inc.
, Google parent Alphabet
, Facebook and Instagram parent Meta Platforms
, Microsoft
, Amazon.com
and Tesla Inc.
, has advanced more than 4% so far this month, rebounding froma steep 9% decline in June — the ETF’s second-worst month on record.
The fund’s July advance was primarily driven by strong gains in Apple and Meta. Apple’s roughly 15% gain on the month helped it reclaim its title as the world’s most valuable company on Friday, while Meta climbed 14.7% in July, according to FactSet data.
Yet recent trading action has been less about the direction of the market than a rotation beneath the surface. The rebound in megacap tech stocks largely offset a sharp selloff in semiconductor
and memory-chip stocks
, which got hammered after their seemingly unstoppable run in the first half. The rotation between the market’s two biggest leadership groups helped keep most broader stock indexes in check, leaving the S&P 500 largely unchanged from a month ago.
“Now, investors are rotating back to AI takers from makers,” said Steve Sosnick, chief strategist at Interactive Brokers. “Think about being on a tour boat where people move from one side to the other, and then, when it gets too busy, they go back to the other side of it.”
See: Semiconductor stocks are on the verge of a bear market. Is the thrill in the chips trade gone?
Still, the comeback of the so-called Magnificent Seven group of tech names has investors wondering if they can finally do what nothing else has: wake up a bull-market rally that’s gone stubbornly cool.
“Some of the semiconductor stocks could become quite big on their own, but not as big as the Magnificent Seven, so it’s very hard for the stock market to rally without them for too long,” Sosnick told MarketWatch. “When you have very, very top-heavy indices, you still need the companies at the top to at least keep pace.”
The Magnificent Seven stocks account for over 30% of the total S&P 500’s market capitalization. The weakness in the group last month has kept the large-cap index from closing at a record high for more than six weeks — the longest such streak since April, according to Dow Jones Market Data.
See: The U.S. stock market is looking like a rubber band ready to snap
In the view of John Campbell, senior portfolio manager at Allspring Global Investments, there’s a simpler explanation for the Magnificent Seven’s recent comeback: “safety in earnings.” This week’s quarterly results from Big Tech could be what finally helps push the S&P 500 higher, he added.
“The Magnificent Seven [group] has been a huge driver of earnings growth for the overall S&P 500 index, and they’ve been the ‘high-quality’ place to get earnings growth,” Campbell said, adding that the seven-stock grouping “is now more of a safety trade, so there’s a bit of investor pre-positioning before earnings season.”
Wednesday will kick off the earnings season for technology companies, with Magnificent Seven constituents Alphabet and Tesla set to report quarterly results after the closing bell.
The earnings outlook for the Magnificent Seven does appear pretty strong. The group is expected to deliver a 31.1% annual earnings-growth rate for the second quarter, compared with 22.8% among the remaining S&P 500 companies, according to John Butters, senior earnings analyst at FactSet Research Systems.
However, four of the top five among the S&P 500 ranked by forecast earnings growth — Micron Technology
, Chevron
, ExxonMobil
and Broadcom Inc.
— aren’t Magnificent Seven companies, Butters added.
Earnings could cut both ways. Rather than lifting the Magnificent Seven as one, they could ignite a further sorting of what appears to be the winners from losers across the broader AI trade — chips and software included. That could further reward companies already monetizing the historic capital expenditures necessitated by the AI build-out and punish those still burning cash on promises, according to market analysts.
To be sure, top-tier tech earnings aren’t the only catalyst that could disrupt the calm in the stock market this week. A wild card that isn’t new, but hasn’t gone away, is the potential escalation of hostilities in the Middle East and another surge in oil prices
.
Last week, President Donald Trump reinstated a blockade on Iranian shipping through the Strait of Hormuz, sending global oil prices
back above $87 a barrel, according to FactSet.
“I find it a bit troubling in the sense that there’s too much complacency in the stock market on geopolitical tensions and the macro impacts from it if we do get a spike back up in oil,” Campbell told MarketWatch.
U.S. investors probably “have more luxury to not worry too much about it” for now, he added, but the latest developments and surging oil prices are still set to collide with the Federal Reserve’s policy meeting on July 28 and 29. That could another layer of uncertainty to a market where the interest-rate outlook remains uncertain, despite a June retreat in inflation.
U.S. stocks finished the week lower on Friday. The S&P 500 was off 1.6% on the week, while the Dow fell 0.9% and the Nasdaq Composite slid 2.9%, according to FactSet data.
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About the Author
Isabel Wang is a Markets Reporter for MarketWatch.
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