Magnificent Seven drags stocks lower: Top takeaways

The three major US stock indexes (^GSPC, ^DJI, ^IXIC) closed lower on Wednesday. The Magnificent Seven led the drop, with powerhouse Nvidia (NVDA) losing over 3.5% at close. Those seven stocks have become a significant part of the S&P 500, meaning their losses and gains can have an outsized impact on the index. Traders are also contending with "bumpy" earnings and inflation data.

Yahoo Finance Reporter Josh Schafter joins Market Domination Overtime to break down the trends in the market and the top market takeaways for April 17.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Nicholas Jacobino

Transcripción del vídeo

JOSH LIPTON: The NASDAQ and the S&P 500 closing lower for the fourth day in a row here. Josh Schafer is here with the takeaways from the trading day. Josh.

JOSH SCHAFER: Yeah. Josh Cooley was just highlighting this when we took a look at the NASDAQ 100. But what you saw for a lot of the day is big tech leading the losses here. I mean, you take a look at our core Mag Seven group, so to speak. And the only one that was up on the day was alphabet. Significant drop in NVIDIA, significant drop in Amazon, Meta Amazon and Meta were both off more than 1%. NVIDIA almost off 4%. Of course, that was largely tied to news in the semiconductor space itself. So I'm using the term tech here. But we're going to go broad on the term tech with that.

But I think what's interesting and our head of news Myles Udland highlighted this morning in our Yahoo Finance morning brief newsletter is just these companies, the seven companies that we've talked about or the top 10 companies in the market. However, we want to define because take I think Tesla out here are still an outsized part of the S&P 500 and really can drive market action. And what's interesting to me just as we watched it play out throughout the day, it is mattering a lot where these stocks are headed. We spent a lot of the last month or two talking about the quote unquote broadening of the rally.

And these other sectors can help. But if tech falls off and these big companies fall off, it's going to matter to the market.

JULIE HYMAN: It's going to be really interesting and important when they start to report. And ASML, as we talked about earlier, even though the ASML executives were optimistic that the rest of the year is going to look better. I wonder if that raises the question in some investors' minds is this a negative sign for big tech. Which they need to do well during this earnings season.

JOSH SCHAFER: And they brought up the cyclical nature of the business. Which I know we've talked about a lot with NVIDIA. It seems like it doesn't matter that they're still in a cyclical business. But you wonder when you start to see Warning signs like that of the cyclicality that can happen in the semiconductor space. Do people start to then bring that thesis back to the stock that has been roaring? I don't know, it's to be seen. And I think we'll find out more when NVIDIA reports really at the end of earnings. We've still got more than a month until then. But I do think that's going to be an interesting trend to watch. Broadening it out. Choppy market day again guys.

JULIE HYMAN: Yeah. You wrote about that today.

JOSH SCHAFER: Yes.

JULIE HYMAN: It might not just be today that's going to be choppy.

JOSH SCHAFER: Yeah. It seems like we're entering a different phase of the market. For the first quarter of the year, we sort of just went up and to the right. If you didn't really check the stock market for a week and you checked it a week later, it was probably up on the week. That was where we were at. We went up 10%. It was the best first quarter we've had in five years. And now we're down almost 4% to start April. And it feels like we've been talking a lot about-- we've been using the word bumpy a lot with inflation because Jay Powell used it. Well everything seems kind of bumpy though.

Earnings have been bumpy. One bank says things are going well and they're doing a little bit better than expected. Maybe you don't get that across all the banks. Maybe you're not seeing that across all of earnings. And I think it's contributing to the market action a little bit be. Spoke had an interesting stat out today. They said that the S&P 500 fell more than 0.5% from its intraday high today. It's done that for the last four days. So that means that we're starting Josh, you pointed this out in the break. We've been starting a lot of these days in the green. And then coming down.

JOSH LIPTON: I think that's three days in a row. We were green and then--

JOSH SCHAFER: Three days probably that we were--

JOSH LIPTON: --starting higher in the green and then fading.

JOSH SCHAFER: Yeah. And normally people don't really take that as that positive of a sign to give you perspective. The only other time in the last year that's happened was the end of October. Where were we at the end of October or most recent lows. So not exactly great. I'm great sentiment.

JULIE HYMAN: Although then Stocks went up from there.

JOSH SCHAFER: Yeah. So we're already at the bottom of the drawdown, Julie.

JULIE HYMAN: But you said what? It's the fourth straight session that is down for the first time-- for the S&P first time since early, the beginning of the year, basically.

JOSH SCHAFER: Since the beginning of the year. Yeah. So it's just a reminder that, yes, we had a really good first quarter. But that's not really always how it goes.

JULIE HYMAN: Stocks go down sometimes.

JOSH SCHAFER: Stocks go down sometimes.

JULIE HYMAN: But over the long term, stocks go up.

JOSH SCHAFER: There we go.

JULIE HYMAN: Again, to quote "Myles Udland and Sam Rowe."

JOSH LIPTON: Thank you Josh.

JOSH SCHAFER: Yeah.

JOSH LIPTON: Appreciate it.