The Magnificent Seven stocks experienced a sharp plunge in market value Tuesday, shedding over $250 billion in value a single session as hotter-than-expected inflation data sparked a widespread sell-off in U.S. stocks.
The group, which includes heavyweights Microsoft Corp. (NYSE:MSFT), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), NVIDIA Corp. (NASDAQ:NVDA) and Tesla, Inc. (NASDAQ:TSLA), saw its collective market capitalization dip below the $13-trillion mark.
Microsoft bore the brunt of the market-cap decline, with nearly $75 billion wiped out in just one session. Tesla recorded the day’s worst stock performance among the Magnificent Seven with a 2.9% drop.
Magnificent 7 Price Action, Market Cap Plunge
| Company | Market Cap | Market cap loss (1-day) | 1-day %chg |
| Microsoft Corporation | $3,010.07B | $ -73.65B | -2.45% |
| Apple Inc. | $2,839.76B | $ -49.31B | -1.74% |
| Alphabet Inc. | $ 1,799.58B | $ -40.53B | -2.25% |
| NVIDIA Corporation | $1,765.33B | $ -18.99B | -1.08% |
| Amazon.com, Inc. | $ 1,745.86B | $ -43.21B | -2.47% |
| Meta Platforms, Inc. | $ 1,170.79B | $ -24.12B | -2.06% |
| Tesla, Inc. | $ 581.61B | $ -17.03B | -2.93% |
Hot Inflation Report Sparks Market Reset
Heading into the January inflation report, major stock indexes were flirting with record highs, buoyed by relatively benign expectations from Wall Street economists.
The consensus among economists called for a drop in annual inflation to 2.9%, which would have been the lowest in nearly three years, and anticipated a fall in core inflation to 3.7%.
Contrary to these expectations, inflation rates came in higher than anticipated. January’s headline CPI inflation rose to 3.1% year-over-year, while the core inflation unexpectedly hit 3.9%.
The higher-than-expected inflation readings dimmed hopes for imminent Federal Reserve rate cuts, pushing expectations for a substantial cut out to July 2024. As a result, the number of rate cuts the market is anticipating in 2024 has decreased to four, a significant reduction from the seven cuts projected just a month earlier.
This sudden shift in expectations for Federal Reserve rate cuts sent tremors through the financial markets Tuesday. The S&P 500, as represented by the SPDR S&P 500 ETF Trust (NYSE:SPY), tumbled 1.6%, marking its worst performance in nearly a…
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