The S&P 500 soared into bull market territory in Q2 as a handful of stocks dubbed the “Magnificent Seven” benefited from market conditions and growing interest in Artificial Intelligence (AI).

The stocks, which include Apple, Microsoft, Nvidia, Amazon, Meta (Facebook) and Alphabet (Google) accounted for over 100% of the gains, in a phenomenon reminiscent of the Tech Bubble in the late 1990s. 

S&P 500: Performance Contribution

Source: Bloomberg, as of May 31, 2023. 

The level of concentration in the S&P 500 reached historical highs in the second quarter, with the Magnificent Seven comprising over 27% of the index in May 2023¹, which largely drove its strong performance.

Empire Life’s Ashley Misquitta, Senior Portfolio Manager and Investment Strategist and Dave Paterson, Portfolio Manager, discuss the events that led to this occurrence.