'Magnificent Seven' tech stocks lose $1.72T market cap: Here's why
What's the story
The ongoing Israel-US-Iran conflict has taken a toll on the US stock market, with major indices witnessing a downward trend. The Dow Jones Industrial Average index entered corrective territory last Friday after five consecutive weeks of losses. This is largely due to fears that Iran could further disrupt the Strait of Hormuz, a key oil trade route.
Impact
S&P 500 down nearly 9%
The S&P 500 index has retraced nearly 9% from its record high of 7,002.28, hitting a seven-month low. This decline highlights the impact of the Israel-US-Iran war on the US stock market over the past four weeks. The so-called "Magnificent Seven" stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla, have suffered major losses during this period.
Financial toll
Magnificent Seven see heavy losses
Over the four weeks of the US-Iran war, the combined market cap of the Magnificent Seven stocks has plummeted by a staggering $1.72 trillion. Alphabet leads this loss with a $450 billion dip in its market cap, followed by Meta Platforms which has seen shareholders lose $310 billion during this period. Other tech giants like Microsoft and NVIDIA also witnessed significant declines in their stock prices and market caps due to the ongoing conflict.
Market response
Brent crude price surges
Doug Beath, the Global Equity Strategist at Wells Fargo Investment Institute, said this week's diplomatic dissonance between the US and Iran dismayed investors. He added that "by the end of the week, risk appetite could not withstand the fog of war." Meanwhile, Brent crude oil price surged 3.4% to settle at $105.32 per barrel amid fears of prolonged disruptions to energy supply chains in West Asia due to geopolitical tensions.