It's been a rough couple of weeks for the Magnificent Seven stocks. But it's been a boon for some other S&P 500 stocks.
Eleven S&P 500 stocks, including D.R. Horton, Solventum and Pool, rallied 16% or more since just July 10, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. D.R. Horton's shares are up more than 23% in that time.
That's a strong contrast to the Magnificent Seven. The Roundhill Magnificent Seven ETF is down more than 12% since peaking on July 10 — putting it into correction territory. Even shares of AI superstar Nvidia are down roughly 15% from July 10.
"Volatility came back with a vengeance this week as selling pressure in the megacap space dragged down the broader market," said Adam Turnquist, chief technical strategist at LPL Financial. "Counterbalancing weakness in these heavyweight names poses a challenge for the rest of the market."
Building From The Mag Seven's Pain
Homebuilders' stocks are some of the biggest winners during Big Tech's wreck. Three of the 10 top performers in the S&P 500 since July 10 are homebuilders including D.R. Horton plus Lennar and PulteGroup.
But the homebuilder stock rally runs even deeper than this. Another three of the top 10 stocks from July 10 are connected to the building industry. That includes pool supply company Pool, home materials firm Mohawk Industries and Builders FirstSource.
What's behind the home-stock rally? In some ways, the homebuilders were primed for a rise. D.R. Horton sports a solid Composite Rating of 90, thanks to an EPS rating of 92.
But the real lift is the rising possibility of a cut in short-term interest rates. Investors see a roughly 90% chance of a quarter-point cut in interest rates at the Federal Reserve's meeting in September, says the CME FedWatch tool.
Lower rates stimulate demand for homes. And that's a perk for the whole homebuilding industry.
It's Not Just About Homes
The whole homebuilding industry is getting a stock lift as techs suffer. But that's not the whole story.
Shares of Solventum, a health-care equipment manufacturing firm, are up more than 19% in the past two weeks. That means it's actually outperforming Nvidia in that time. The rally ends what's been a tough debut for the 3M spinoff this year. Shares trended lower since their first day of trading in April, and it has a Relative Strength of just 16.
But investors spot a value. Shares are trading for only seven-times trailing profit. That's well below the valuations of some of the S&P 500 stocks selling off the most. And now, that's looking like a solid bet.
S&P 500 Gained The Most During 'Mag 7' Sell-Off
They're all up 16% or more from July 10
| Company | Ticker | Ch. Since July 10 | Sector |
|---|---|---|---|
| D.R. Horton | 23.7% | Consumer Discretionary | |
| Pool | 20.4% | Consumer Discretionary | |
| Solventum | 19.4% | Health Care | |
| CBRE Group | 19.4% | Real Estate | |
| Mohawk Industries | 19.1% | Consumer Discretionary | |
| Citizens Financial | 17.9% | Financials | |
| Lennar | 17.5% | Consumer Discretionary | |
| United Rentals | 16.9% | Industrials | |
| PulteGroup | 16.7% | Consumer Discretionary | |
| Paycom Software | 16.1% | Industrials | |
| Builders FirstSource | 16.1% | Industrials |
