The so-called Magnificent Seven tech stocks have seen $1.1 trillion in value erased in a five-day stock sell-off.
The Roundhill MAGS ETF tracks the price of the most extensive seven tech stocks and tests uptrend support after the sell-off.
It was a big day of losses for Wall Street on Wednesday, with tech stocks falling with a semiconductor broad-based sell-off following news that the Biden administration is looking to step up export restrictions to China.
Bloomberg said on Wednesday that the US had advised its allies to impose the strictest trade restrictions possible if companies such as Tokyo Electron and ASML Holding NV continued to supply advanced chips to China. Shares of the Dutch chipmaker ASML Holding fell more than 12%, marking the worst decline since March 2020.
The Magnificent Seven stocks also suffered, with the seven companies losing $500 billion in market cap on Wednesday, meaning the stocks have lost a combined $1.1 trillion in the last five days.
Nvidia Corp alone sank by 7%, accounting for a $180 billion loss in the company’s valuation. Another Mag 7 company is Meta Platforms, and the stock sank after a weaker-than-expected revenue outlook from the Facebook parent.
Adding to the tech sector’s woes were the latest GDP figures released by the Bureau of Labor Statistics. The US economy expanded at a significantly reduced pace of 1.6% annually, a sharp slowdown from the previous quarter’s 3.4% growth rate and well below the forecasted 2.5%.
Microsoft also contributed to the tech market rout, wiping out $126 billion in value, down 4.3% ahead of the company’s latest earnings report after the market closed.