Overview
- Microsoft and Meta have fallen about 35% from recent peaks, leaving both near last April’s lows even as the S&P 500 is about 32% higher than it was then.
- Every member of the Magnificent Seven is down double digits from its 52-week high, showing a concentrated pullback in the largest U.S. tech stocks.
- The Iran war has pushed oil prices higher and revived inflation fears, and market bets now show greater odds of Federal Reserve rate hikes by year-end, which lowers the value investors place on far-off tech earnings.
- Planned AI infrastructure spending by Google, Microsoft, Amazon, and Meta is expected to top $650 billion in 2026, about 60% more than 2025, raising margin worries and steering money toward energy, defense, and manufacturing stocks.
- Analysts warn the market may not have bottomed yet, with about 43% of S&P 500 stocks above the 200-day mark, even as Capital Economics says the AI buildout likely continues unless the war is prolonged.