Magnificent 7 lose $1 trillion as AI fears drive broad stock sell-off
A sell-off driven by worries about slowing artificial intelligence spending erased $1 trillion from the Magnificent 7 and pushed the Nasdaq into correction territory.
At a glance
- The Magnificent 7 lost $1 trillion in value as AI-related fears drove a broad US stock sell-off on Thursday.
- The Nasdaq Composite fell more than 5% and closed in correction territory, along with the Russell 2000.
- The Dow fell more than 1,800 points, or more than 3%, and the S&P 500 pulled back more than 4%.
US stocks suffered a major sell-off on Thursday, with the group of large companies known as the Magnificent 7 losing $1 trillion in value as investor fears about a slowdown in the buildout of artificial intelligence shook the AI trade and the broader market.
Major indexes fall
The tech-heavy Nasdaq Composite fell more than 5% and finished in correction territory, a move matched by the small-cap Russell 2000 index. The blue-chip Dow Jones Industrial Average retreated more than 1,800 points, or more than 3%. The broad S&P 500 pulled back more than 4%.
The selling spread across the market, touching technology shares, the blue-chip companies that make up the Dow and the small caps tracked by the Russell 2000, as well as the wider S&P 500. All of the gauges ended the session lower.
Wednesday's rally erased
Thursday's declines gave back the big gains seen in Wednesday's postelection rally — and then some. That left the major indexes below the levels reached before the rally took hold.
The worry driving the retreat concerned the pace of the artificial intelligence buildout. According to CNBC, that fear rocked not only the AI trade itself but also the broader market, which is why the fallout reached beyond technology stocks.
The scale of the day's damage was visible in the headline numbers: the Nasdaq's drop of more than 5%, the Dow's fall of more than 1,800 points, the S&P 500's decline of more than 4% and the Russell 2000's slide into correction territory.
The most eye-catching figure from the session was the $1 trillion in value lost by the Magnificent 7.
Source: CNBC.
Questions and answers
- Why did the stock market fall on Thursday?
- Investors were worried about a slowdown in the buildout of artificial intelligence. That fear hit the AI trade and the broader market, sending every major index lower.
- How much did the Magnificent 7 lose?
- The Magnificent 7 lost $1 trillion in value during Thursday's sell-off, the most eye-catching figure from the day's market rout.
- How far did the main indexes fall?
- The Nasdaq Composite fell more than 5% and ended in correction territory with the Russell 2000. The Dow dropped more than 1,800 points, over 3%, and the S&P 500 fell more than 4%.
