IXIC: Nasdaq Composite Wipes Out 2% in Big Shakeup, Mag 7 Stocks Lose $600 Billion

It was a bad day to be a tech stock as “sell the news” reaction dragged Mag 7 lower following softening inflation data.

• The Nasdaq Composite IXIC went through a rough patch Thursday after its record-setting streak got heavily disturbed by investors moving out of tech. After the latest inflation report signaled price pressures were easing, money managers decided it was time to unwind their bullish bets on the tech sector and stuff their cash into small cap stocks. The result — the Nasdaq dropped 2% on the day.
• Its main constituents — the Magnificent Seven — wiped out more than $600 billion, the biggest single-day loss since February 2022. Chip giant Nvidia NVDA tanked 5.6%, followed by Meta’s META 4.1% decline. EV maker Tesla TSLA was the biggest underperformer with an 8.4% drop for the session. It snapped a charged-up 11-day winning streak after news that the robotaxi will be delayed.
• At the same time, small cap companies soared. The Russell 2000 index took off by 3.6%, logging its best day since November as traders chose to bet on beaten-down stocks that could benefit from easing borrowing costs. Futures contracts on Friday were mostly in the green with Dow futures up about 0.1% and S&P 500 futures higher by 0.08%. Nasdaq futures were in the red by just 0.04%.