U.S. Stock Sell-Off Hits AI Leaders, "Magnificent Seven" Lose Over $850 Billion in Market Cap

Deep News
Mar 28

Over the past week, escalating concerns that persistent high inflation will keep interest rates elevated for longer, combined with company-specific adverse factors, led to a significant sell-off in major technology stocks. The collective market capitalization of the "Magnificent Seven" U.S. stocks plummeted by over $850 billion during the week. Meta recorded its worst weekly performance since October 2025, with its shares falling more than 11%. The decline continued as Wall Street reacted to the company's loss in a landmark social media lawsuit earlier in the week. A jury found that Meta and Google's parent company, Alphabet, were negligent in failing to protect underage users on their platforms. Shares of Alphabet fell nearly 9% over the week. Microsoft dropped 6.5% and is poised for its worst quarterly performance since 2008, with software stocks being particularly hard hit. Nvidia and Amazon both declined approximately 3% for the week, while Tesla fell nearly 2% over five trading sessions. The semiconductor sector saw a rebound on Friday; however, SanDisk and Micron Technology still ended the week lower after sharp declines on Thursday. Preceding the sell-off, Alphabet released new research unveiling an algorithm designed to reduce the memory footprint of AI, causing volatility in memory chips and the broader semiconductor sector. Growth stocks were heavily impacted this week due to rising oil prices boosting inflation expectations and pushing bond yields higher. Investors are now questioning whether the Federal Reserve will be able to cut interest rates this year as previously anticipated. Apple was the only stock among the "Magnificent Seven" to post a slight gain for the week, following reports that the company plans to open its Siri voice assistant to AI services competing with OpenAI's ChatGPT.

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