Magnificent 7 Rotation Pushes S&P 500 to Record $70 Trillion Market Cap
A historic market rotation into large-cap tech has driven the S&P 500 to new highs. Microsoft and Amazon surged 25% in five days, with the index now worth a record $70 trillion.
On July 15th, analysts on Fox Business called for a rotation back into the Magnificent 7, predicting it would lead the S&P 500 to 8,000. At the time, chip stocks had taken market leadership, allowing the tech giants to correct while still posting historic earnings growth, without dragging the broader index lower. The divergence between the S&P 500 and the Magnificent 7 was the widest since 2022.
Fast forward less than three weeks, and that rotation appears to be playing out. The S&P 500 has climbed above 7,700, and Microsoft and Amazon jumped 25% in just five days. The index's total market capitalization hit a record $70 trillion.
Notably, many large-cap technology names are now trading cheaper than the S&P 500 on a forward P/E basis, meaning stocks are getting cheaper even as prices rise.
Source: The Kobeissi Letter