Mag 7 Earnings Season Kicks Off: Can Tech Stocks Halt the Slide?
nashnova research
Mag 7 earnings kick off next week as the Philadelphia Semiconductor Index posts its longest losing streak since 2008 and Treasury yields drop from 5.33% to 5.055% in three sessions — the bond market is now taking its cues from tech earnings.
How bad is the tech sell-off?
The Philadelphia Semiconductor Index has fallen for eight straight sessions, its longest losing streak since 2008, and sits deep in bear-market territory.
The Magnificent Seven tracker dropped 2.1% over two days; the Nasdaq Composite lost 2.4% for the week and has turned negative for the month.
Software stocks accelerated the rout on Friday: the iShares Expanded Tech-Software ETF fell 4.2%, Salesforce dropped 3.3%, and Microsoft slid 2.1%, dragging the Nasdaq down 1.3% on the day.
Why is the bond market moving in lockstep with tech?
U.S. Treasury yields fell sharply over three sessions — from a Wednesday intraday high of 5.33% to a Thursday low of 5.055% — the biggest weekly price gain since February.
BTIG chief market technician Jonathan Krinsky noted that bonds now correlate more strongly with the Nasdaq than with crude oil prices.
This means → The bond market is no longer driven by inflation and rate expectations alone; tech-sector earnings have become a core variable steering Treasury yields.
Who is warning of an "AI bubble unwinding"?
Capital Economics chief markets economist Jonas Goltermann called this week's bond-tech linkage "a departure from recent norms."
His diagnostic formula: equities falling + tech underperforming + yields dropping + dollar weakening = the market pattern you'd expect when an AI stock bubble starts to deflate.
He forecasts a more sustained pullback over the next year or so, accompanied by lower Treasury yields.
In plain terms = If all four of these things happen at once, the market isn't just correcting — it's repricing the AI trade.
What stress signals are showing up in credit markets?
High-yield spreads — the gap between risky corporate-bond rates and Treasuries, wider means more default fear — have widened, and the cost of default protection for investment-grade borrowers has risen.
Capital is rotating out of tech into non-tech defensive sectors.
CoreWeave shares have fallen nearly 30% from their early-October high, making the stock a focal point for AI valuation anxiety.
Can next week's earnings turn the narrative around?
Meta and Tesla report first, followed by Alphabet, Amazon, Apple, and Microsoft; Nvidia reports in November.
22V Research's Dennis DeBusschere noted that index-level dependence on tech earnings now exceeds the peak of the 2000 dot-com bubble.
This means → If earnings can't prove that AI capital spending is paying off, the repricing chain stays intact and the tech slide could extend through all of October.
What does the legendary investor see ahead?
Paul Tudor Jones told CNBC this week that midterm elections could give stocks a short-term lift.
But he added: "If you look out a year, 2027 is going to be a very tough year."
This reflects a widening split — even if event-driven bounces appear in the near term, long-horizon capital is losing confidence in tech valuations.
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