The Magnificent Seven tumbled on Wednesday after earnings reports from Tesla (TSLA) and Alphabet (GOOGL) raised concerns about slowing earnings growth at America's tech ꦇtit༒ans. 

Shares of the Roundhill Magnificent Seven ETF (MAGS) fell 6.1% Wednesday, their largest daily decline since the ETF launched in April 2023. Wednesday's rout plunged the index into 澳洲幸运5开奖号码历史查询:correction territory.

The tech giants, which were cumulatively worth about $16 trillion as of Tuesday’s close, weighed heavily on the major indexes. The S&P 500 slumped 128 points, its biggest drop since September 2022; tꦏhe Mag Seven accounted for approxima🐼tely 85 of those points.

Tesla and Alphabet Earnings Disappoint

Earnings season got off to a rough start for the group Tuesday afternoon when Tesla 澳洲幸运5开奖号码历史查询:missed quarterly earnings estimates. The electric vehicle maker reported a 45% decline in profit as 澳洲幸运5开奖号码历史查询:artificial intelligence (AI) development costs increased and average vehicle sales prices declined. Tesla shares tumbled more than 12% Wednesday as Wall Street parsed the earnings and digested a 澳洲幸运5开奖号码历史查询:delayed rollout of its robotaxi. 

Spending on AI also sank Google-parent Alphabet’s stock on Wednesday despite it 澳洲幸运5开奖号码历史查询:beating earnings estimates for the quarter. The company reported spending $13.2 billion on property and equipment in the quarter, nearly double the same period a year ago. CFO Ruth Porat warned on a call with analysts that capital expenditures would 澳洲幸运5开奖号码历史查询:remain near that level for the remai𝄹nder of the year. Alphabet sh𒁏ares fell 5%. 

More Mega-Cap Earnings Coming Next Week

Microsoft (MSFT) is the next of the seven to report earnings, with its report 澳洲幸运5开奖号码历史查询:slated for Tuesday afternoon. Meta (META), Apple (AAPL), and Amazon (AMZN) are also scheduled to report next week.

The Magnificent Seven is, as a group, expected to report earnings grew 30% in the second quarter, according to Bank of America analysts. That’s well ahead of the 10% rate forecast for the entire S&P 500, but it would make the group’s second consecutive quarter of slowing growth.

Even before Wednesday's slide, mega-cap tech names, which had powered broader market gains all year, had started to fall out of favor as investors rotated into shares of smaller companies that stand to benefit most from widely anticipated rate cuts by the Federal Reserve.

Despite the steep declines recently, all but one of the Magnificeꦗnt Seven stocks are in positive territory for the year, with Tesla being 🅘the outlier.

Update—July 24, 2024: This article was updated to reflect price changes at the market close.