Magnificent 7 Woes Worsen with Iran War

The Magnificent Seven has become the “Miserable Seven” for investors this year.

The Magnificent Seven’s downturn and broader tech weakness have deflated valuations. (Photo: Nasdaq)

Their weakness, combined with the Iran war, may have distracted investors from just how bad conditions have become for megacap market leaders.

Tech giants have driven the market higher for years—now they are leading it lower, Callum Keown reported for Barron’s Daily.

Microsoft stock has fallen 23% in 2026, on track for its worst quarter since the final three months of 2008 and its worst start to a year on record. Google parent Alphabet has also suffered a sharp decline, down 15% from its closing high set just last month and nearing bear-market territory.

Only Nvidia and Amazon have eked out gains since the Middle East conflict began, though both are still down 4% and 8%, respectively, for the year.

The entire group is at least 10% below their 52-week closing highs, ranging from Apple’s 12% decline to Microsoft’s 32% drop, with Meta down 25% in between, according to Dow Jones Market Data.

These declines follow meteoric gains driven by the artificial intelligence boom.

This raises a difficult question for investors: is it time to buy back into these once-favored behemoths? The rapid shift in interest-rate expectations since the war began on Feb. 28 has not helped.

Markets now see a greater likelihood of rate hikes by year-end rather than cuts, according to CME’s FedWatch tool.

Expectations of a Federal Reserve easing cycle had been a key argument against an AI-driven bubble bursting—that support has now weakened. Still, the Magnificent Seven’s downturn and broader tech weakness have deflated valuations, which may prove healthier for markets in the long run.