It’s difficult to make a statement that will be greeted with near unanimous agreement. Try telling a crowd of fifty people “the economy is fine” or “we went to the moon in 1969” or “technological progress is beneficial for society.” No one can agree on anything. Well, except for one take on the markets in 2024 and 2025 that went something like this:
The market is overconcentrated in the Magnificent Seven stocks. They are driving all the returns. If those stocks roll over, they will take the entire market with them.
We heard that opinion seemingly every day. For years. The premises were reasonable. In January ’24 the Magnificent Seven stocks (Apple, Microsoft, Nvidia, Meta, Google, Amazon, and Tesla) made up 28% of the S&P 500. By the end of 2025 their collective weighting had increased to 35%. In 2024 the S&P 500 returned +25.02% while the Magnificent Seven stocks collectively delivered +63.99%. (Thus, the remaining 493 S&P 500 constituents were a drag on the index’s return). The trend continued in 2025 albeit less dramatically as the index returned +17.88%, pulled higher by the Mag7’s +22.99% performance.
By this time, the narrative had firmly taken hold. The market is overconcentrated. Seven stocks make up 35% of the market. If the Mag7 decline they’ll take the whole market with them.
Understandable. Reasonable, even.
And - per the first half of 2026 - completely wrong.
At the halfway mark of the year, the Magnificent Seven collectively is in the red at -2.52%.
The S&P 500? +10.21%
The Magnificent Seven stocks still make up 32% of the S&P 500, but the index itself has returned in excess of 10% through the first half of the year despite its seven largest constituents, which make up a third of the index itself, providing a negative return.
Even better, mid cap stocks, small cap stocks, and international holdings outperformed the S&P 500 through 1H ’26, returning +17.34%, +23.90%, and 14.01%, respectively.
An observer in ’24 or ’25 predicting the Mag7 stocks would soon roll over without any discernable negative impact on the broader market would have been laughed out of the room.
Who's laughing now?
Sean Cawley, CFP ®
Source: YCharts
Note: the Mag7’s performance here is proxied by MAGS, an ETF that equally weights the seven stocks making up the Magnificent Seven.
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This commentary reflects the personal opinions, viewpoints, and analyses of Resolute Wealth Management. It does not necessarily represent those of RFG Advisory, clients, or employees. This commentary should be regarded as a description of advisory services provided by Resolute Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.