Benzinga·2025-11-10 13:42Economic Overview - The U.S. economy is increasingly characterized as a 'K-shaped economy,' where the financial fortunes of wealthy consumers and those at the lower end of the income spectrum are diverging [1][5][6] Company Performance - The "Magnificent Seven" tech companies—Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—have seen a significant rise in their earnings expectations since the beginning of 2025, contrasting sharply with the broader market [2][3] - Earnings per share (EPS) consensus estimates for the "Magnificent Seven" increased by nearly 4% from October 2025 to April 2025, while the average estimates for the S&P 500 declined by about 0.2% during the same period [4] Market Sentiment - Despite the overall decline in EPS estimates for the majority of S&P 500 companies, the "Magnificent Seven" have heavily invested in AI, leading to a substantial increase in their consensus estimates [3][4] - Wealthy Americans are experiencing improved sentiment due to rising stock markets, while average Americans are growing more pessimistic about the economy, as indicated by a drop in consumer sentiment to its lowest level since June 2022 [5][6] Recent Market Activity - Recently, tech stocks, particularly AI-related shares, faced a sharp selloff, with the combined value of the "Magnificent Seven" dropping from over $22 trillion to $21 trillion, resulting in a loss exceeding $1 trillion [7] - Over the past six months, the SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF have shown significant gains, climbing 15.09% and 20.06% respectively [8]