Excluding the "Magnificent Seven" Stocks, Here's How the Market Is Performing in 2026

Core Insights - The "Magnificent Seven" tech stocks have underperformed in 2026, declining approximately 4.9% as measured by the Roundhill Magnificent Seven ETF (MAGS) [2] - In contrast, the broader S&P 500 index is up about 1.7% this year, while the tech-heavy Nasdaq Composite remains flat [3] Group 1: Performance of the Magnificent Seven - The Magnificent Seven stocks have seen a significant decline since peaking in late October 2025, indicating a downward trend over the past four months [2] - Investor sentiment has shifted, leading to a cautious approach towards the overcrowded AI trade that previously fueled the growth of these stocks [2] Group 2: Performance of Other Stocks - The remaining 493 stocks in the S&P 500, referred to as the "Impressive 493," are performing well, with a 2.9% increase this year as measured by the Defiance Large Cap ex-Mag 7 ETF (XMAG) [3] - Other sectors such as energy, industrials, basic materials, consumer defensive stocks, and healthcare are thriving in 2026, contrasting with the stagnation of big tech [5] Group 3: Market Rotation - A notable market rotation is occurring, moving investment focus from the Magnificent Seven to a broader range of companies [4] - Market analyst Edward Yardeni has expressed concerns about the concentration of market power among the Magnificent Seven, suggesting that their continued success depends on widespread adoption of their products and services across other companies [4]