As Expected, the Name 'M7' Lives Up to It... Washed Away the Black Monday Shock

The 'Black Monday' shock that shook the U.S. New York stock market earlier this month was short-lived. The so-called 'Magnificent 7 (M7)', led by AI giant Nvidia, quickly drove a rebound, living up to the name M7, which means 'magnificent.'

[Image source=Reuters Yonhap News]

According to Yahoo Finance on the 20th (local time), since Black Monday on the 5th, the total market capitalization increase of S&P 500 listed companies amounted to about $3.2 trillion, nearly half of which?over $1.4 trillion?was attributed to the M7. The average stock price increase of M7 stocks from Black Monday to the day before was 11.8%, significantly surpassing the S&P 500 index's rise of 8.13%. Yahoo Finance noted, "The M7 is becoming magnificent again," highlighting that "M7 stock prices are rebounding from the sharp decline in early August."

Looking at individual stocks, Nvidia's rally stands out. Nvidia, which was threatened to fall below $100 per share on the 5th, briefly closed below $99 but quickly rebounded to reclaim the $130 level by Monday, the day before. During this period, the stock price surged nearly 30%. Although Nvidia's stock fell by over 2% on the day when the three major New York stock indices closed slightly lower, it remains about 26% higher compared to Black Monday.

Electric vehicle maker Tesla's stock also jumped nearly 12% from the 5th to the day before. Meta Platforms rose 11.25%, and Amazon increased by 10.68%. Apple (7.94%), Microsoft (MS, 6.67%), and Google Alphabet (4.83%) also showed upward trends, though their gains were below the S&P 500 index's rise.

This indicates that many investors saw the Black Monday shock as a buying opportunity for M7 stocks. The recent stream of solid economic indicators has further raised expectations for a soft landing, which has improved investor sentiment centered around the M7. Vince LoRusso, CEO of Claw Capital, mentioned, "M7 companies hold significant cash on their balance sheets," noting that this financial strength acts as a buffer against economic headwinds.

Jax Invest Research also stated in a report, "Nvidia, Meta, and Amazon showed the fastest rises since the lows," adding, "The economic environment and growth surrounding these companies remain favorable. They will continue to lead the M7 and the broader market rally." However, seasonal factors and the upcoming November presidential election were also cited as potential sources of volatility.

Currently, the market is awaiting this week's Jackson Hole Symposium, which could signal a Federal Reserve (Fed) interest rate cut, along with Nvidia's quarterly earnings announcement scheduled for the 28th. If growth forecasts once again exceed market expectations, it could trigger another Nvidia-led rally. Previously, companies like Google revealed results that fell short of Wall Street's expectations amid AI bubble concerns, leading to stock price declines.

This content was produced with the assistance of AI translation services.