The Magnificent Seven may cede leadership to the broader market during the third-quarter earnings season. The group of AI giants is expected to have grown earnings by 20.3% year-over-year, slower than the 27.7% anticipated for the rest of the S&P 500 by Russell Investments. This would starkly contrast with the second quarter, when the Mag-7 saw earnings double while the rest of the index expanded by 30%. The S&P 500 equal-weight index stands roughly 6% off its record, and 75% of constituents finished September in negative territory. A record number of S&P 500 companies are issuing positive guidance, an encouraging sign for broader market participation in the rally.
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