Market rally leaves Magnificent 7 behind as S&P 500 gains 35 points

Everything is up—except the Magnificent 7. The S&P 500 jumped 35 points, while the biggest stocks in tech sat out the rally. Retail investors are back in full force, piling billions into the market as they bet on a rebound.

Retail investors poured $3.2 billion into U.S. stocks and ETFs on Monday and Tuesday alone. That was the biggest two-day retail purchase since August. In the five-day period ending Tuesday, individual investors snapped up $8 billion worth of equities. The five-day moving average of retail flows hit $1.6 billion, making it the fourth-largest on record. The only times this number was higher? January 2021, March 2023, and August 2024. They’re betting on a bottom.

Retail traders drive market comeback

The S&P 500 pushed higher on Monday, trying to claw its way back from a brutal correction. The index jumped 1%, while the Nasdaq Composite gained 0.8%. The Dow Jones Industrial Average rallied 473 points, or 1%, boosted by strong performances from Walmart and IBM.

“We’re in a near-term counter-trend rally,” said Sam Stovall, chief investment strategist at CFRA Research, in an interview with CNBC. He believes the S&P 500 correction could end around 5,400, which would mean just another 4% drop from Friday’s close.

“Not much more to the downside, but … I think that will shake off enough loose hands to allow the market to try to find a bottom,” he added.

The February retail sales report gave traders some relief. Sales rose 0.2% on the month, which was below the 0.6% expected. But excluding autos, the increase was 0.3%, in line with forecasts. That was enough for traders to stay optimistic.

Last Thursday, the S&P 500 officially entered a correction, dropping more than 10% from its record high in late February. Then Friday hit, and the index jumped 2%, with investors rushing to buy up battered tech stocks.

Still, the week was ugly. The Dow suffered its biggest weekly drop since 2023. The Nasdaq Composite remained in correction territory, now down nearly 12% from its record high.

Trump’s tariffs and Musk’s cost-cutting shake up Wall Street

Markets are struggling to keep up with Trump’s erratic tariff policies. His latest moves have added to the uncertainty, leaving traders on edge. Meanwhile, Elon Musk’s DOGE department is slashing costs aggressively, adding even more volatility.

The Trump administration has made it clear: some economic pain is acceptable in pursuit of long-term policy changes. That includes overhauling trade and government agencies. Markets haven’t taken that well.

“I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy. They’re normal,” said Treasury Secretary Scott Bessent on NBC’s Meet the Press. “What’s not healthy is straight up, that you get these euphoric markets. That’s how you get a financial crisis. It would have been much healthier if someone had put the brakes on in ’06, ’07. We wouldn’t have had the problems in ’08.”

Bessent previously warned that a ‘detox’ period might be needed. He said moving from government-driven growth to private spending could bring “more pain before visible GDP gains.”

“The U.S. detox of efficiency, deregulation, and trade may mean more market pain before we see the benefits,” wrote Derek Harris, portfolio strategist for Bank of America Securities, in a weekend note.

Monday’s action was broad. More than 90% of S&P 500 stocks were in the green. That means over 470 members of the index were up by the afternoon. The benchmark itself climbed nearly 1%.

Some of the biggest gainers? Enphase Energy surged more than 9%, while Intel jumped over 8%.

Not every stock got the memo, though. Tesla slid more than 4%, dragging down the Magnificent 7 group even further.

Wall Street firms cut forecasts as Berkshire hits new high

Big banks are adjusting their forecasts. RBC Capital Markets slashed its year-end outlook for the S&P 500 from 6,600 to 6,200, citing economic growth concerns.

That means the firm now sees just a 5.4% gain from last year’s close. Right now, the S&P 500 is still down more than 3% on the year.

“While we don’t believe that a pullback beyond the 10% drawdown that has already been sustained is inevitable, we do believe that the path for stocks between now and December has gotten rockier with stronger headwinds,” wrote Lori Calvasina, head of equity strategy at RBC, in a Monday note.

One stock that didn’t flinch? Warren Buffett’s Berkshire Hathaway. The company’s Class A shares climbed more than 1% on Monday, setting a new intraday record at $782,494.90.

The stock is now up 14% in 2025, crushing the S&P 500’s 3.9% loss. Berkshire Hathaway first crossed the $1 trillion market cap mark in August 2024.

Historically, Buffett’s empire tends to outperform during market turbulence. Investors treat it as a safe bet thanks to its diversified portfolio, which includes insurance, railroads, retail, manufacturing, and energy.

A new regulatory filing revealed that Buffett has been increasing his positions overseas. Berkshire boosted its holdings in five Japanese trading houses—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo—by more than 1 percentage point each. That brings his stakes up to 8.5% to 9.8% in each firm.

Meanwhile, digital asset investment funds are still bleeding. CoinShares reported a fifth straight week of outflows, totaling $1.7 billion for the week ending March 14.

That brings the total outflows to $6.4 billion over this streak. It’s now the longest daily outflow streak in history—17 days in a row.

About 69% of the outflows came from U.S. funds. Bitcoin lost $978 million, while ether saw $176 million in outflows.

Year-to-date inflows are still positive at $912 million, but total assets under management have dropped by $48 billion.

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