U.S. stocks ticked up on Friday, but it wasn't enough to save the S&P 500 from notching its fourth consecutive weekly decline as the long "Magnificent Seven" trade that has fueled market gains for mo๊re than a year continued to falter.

The Magnificent Seven are in the midst of their deepest pullback since the group was named in 2023. The Roundhill Magnificent Seven ETF (MAGS) has fallen nearly 15% from its all-time high on July 10. And despite rising 0.8% on Friday, one Mag Seven index notched its fifth consecutive weekly decline, making this the group's longest losing streak since December 2022.

Nvidia (NVDA), the poster child of the group, finished the week down more than 2% after failiꦯng to stage the kind of comeback it did last Wednesday when it jumped 13% the day after a big selloff. The stock has fallen more than 20% from its recent peak.🍸

The Mag Seven were hit with a triple whammy in recent weeks. First, a soft inflation report on July 11 sparked speculation the 澳洲幸运5官方开奖结果体彩网:Federal Reserve would cut interest rates as early as September, 澳洲幸运5官方开奖结果体彩网:fueling a rotation out of cash-𝔍rich mega caps into the small caps that stand to benefit most from rate cuts.

Second, Wall Street homed in on the Mag Seven's surging 澳洲幸运5官方开奖结果体彩网:artificial intelligence (AI) spending in recent earnings reports, which often overshadowed otherwise solid results. Shares of Alphabet (GOOGL) and cloud competitors Microsoft (MSFT) and Amazon (AMZN) tumbled after the former said it would 澳洲幸运5官方ꦍ开奖结果体彩♕网:continue to ramp up AI infrastructure spending in 2025.

Finally, the unwinding of the 澳洲幸运5官方开奖结果体彩网:yen carry trade, a popular investment strategy in recent 💙years, sparked a broad selloff that sank Mag Seven stocks even further into correction territory on Monday.

What's Next for the Mag Seven?

While substantial economic and political uncertainty continues to loom over financial markets, most analysts have characterized the stock market's recent pullback as a natural and healthy one. 

"On average, stocks experience a pullback of over 5% over three times per year and a correction of 10% or more around once per year—even in positive years," wrote George Smith, portfolio strategist at LPL Financial, in a recent note. He added that 94% of the years since 1928 have seen a pullback of 5% or more, and 64% have had a 10% 澳洲幸运5官方开奖结果体彩网:correction.

"We believe that how common these occurrences are should provide comfort to equity investors, allowing them to be patient, stay invested, and most importantly, to not panic," said Smith.

As for the Magnificent 7 in particular, some see the recent dip as a buying opportu🐓nity.♚ 

Morgan Sta𒐪nley analysts♒ on Thursday argued that the group’s current valuation is, assuming earnings growth expectations hold up, historically attractive.

"The Mag 7 currently trades at a material discount to the trailing 5 year valuation average, as forward EPS growth is expected to accelerate vs. trailing 5 year growth (25% forward CAGR vs. 21% trailing CAGR), implying a median Mag 7 forward 澳洲幸运5官方开奖结果体彩网:PEG ratio of 0.8x vs. a trailing PEG ratio of 1.3x," the analysts wrote.

Though they concede that a 澳洲幸运5官方开奖结果体彩网:soft landing, despite being their base case, is not inevitable, and a recession would dramatically alter the outlook for tech earnin💦gs.

Nonetheless, the group's cost discipline has contributed to resilient earnings, putting the group on relatively solid ground. Plus, based on first-quarter 13-F filings, by which fund managers disclose their holdings, most of the Mag Seven appear to be under-owned relative to their market weight.

"We believe this added context is important given that ... there is a statistically significant relationship between low active ownership relative to the S&P 500 and future stock performance," the analysts wrote.

Update—August 9, 2024: This article was updated to reflect Friday's market close.