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(Bloomberg) -- With frothy corners of the US stock market under duress as investors grow concerned about the economy and the threat from inflation, Wall Street bulls are finding little solace in the one area that’s been unshakable for two years: megacap tech.
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The seven behemoths that powered a 54% surge in US stocks over two years tumbled into a collective correction Tuesday, highlighting a fraught moment for American equities that have churned near records for most of 2025.
The Bloomberg Magnificent 7 Index slid as much as 3.4% Tuesday, taking its drop since a Dec. 17 record past 10%. The group has shed a combined $1.5 trillion in market value in that span. Tesla Inc. has paced the drop in the equal-weighted gauge, plunging 37%. Amazon.com Inc., Microsoft Corp. and Alphabet Inc. have each lost more than 8%. Apple Inc. and Nvidia Corp. are down about 2%, while Meta Platforms Inc. is the only gainer, up nearly 7%. Nvidia is slated to report earnings after markets close Wednesday.
US stocks have wobbled in the four days since closing at a record last week, with investors growing increasingly concerned that President Donald Trump’s tariff threats will weaken the economy and stoke inflation. Trump reiterated Monday that 25% levies on two of America’s biggest trading partners will go into effect next week, a move that economists say will bring higher retail prices on a host of goods. Meanwhile, recent economic data has missed estimates, while US consumer confidence dropped by the most since 2021 last month, data showed Tuesday.
“There’s concerns about growth, there’s still concerns about inflation,” said Alec Young, chief investment strategist at Mapsignals. “You don’t normally have concerns about both at the same time, but that’s a factor. And then the tariffs kind of fan both.”
While the recent selloff doesn’t mean further pain is imminent, the souring of the mood on America’s equity market marks a stark turnaround from Trump’s election in November. His proposals on deregulation and fiscal spending stoked a post-election rally that has since given way to concerns that tariffs and the threat of mass deportations could exacerbate goods and wage inflation.
Signs of stress on American equity markets have heightened in the past four sessions. The Cboe Volatility Index spiked above 20 and the tech-heavy Nasdaq 100 Index is down 5% over that span. The Bloomberg Magnificent 7 Index is on pace for its worst month since late 2022 relative to the S&P 500. Weakness in the S&P’s biggest sector sent the gauge below its average price for the past 100 days for the first time since August.