Big Tech’s Cause for Hope: Link Between Mag 7, S&P 500 Is Broken

For most of its three-year bull run, the S&P 500 Index has moved in lockstep with the shares of technology giants. But the relationship is suddenly breaking down — and that could be good news for languishing tech stocks.

The correlation between an index tracking the so-called Magnificent Seven and the equal-weighted version of the S&P 500, which more accurately reflects the full performance of all the stocks by removing the weighting of the biggest companies, turned negative on Feb. 23, an indication that they were becoming untethered. Since then, the correlation has continued to fall as the war in Iran disrupts markets and sparks a jump in oil prices.