The Magnificent Seven Aren't the Only Game in Town Anymore: Energy, Materials and Consumer Staples are quietly outrunning Big Tech — and that's not an accident.

For three years, owning "the market" basically meant owning seven stocks. That started to crack in February.

An equally weighted basket of the Magnificent Seven gained less than 1% for the month while Energy, Materials and Consumer Staples — three sectors that were dead weight in 2025 — led the S&P 500 higher.

This isn't a rotation out of quality. It's a broadening of it. S&P 500 earnings growth outside the Mag 7 is starting to close the gap with earnings growth inside it, and elevated valuations in the highest-flying names mean the bar for "beat and raise" keeps climbing.

We watched several semiconductor and bank names post real beats this earnings season and still get punished because guidance wasn't euphoric enough.

What we're doing about it: we're not abandoning AI and mega-cap tech — the secular growth case hasn't gone anywhere. But we're sizing new positions in cyclical and value names that have re-rated lower over the last two years and don't need a miracle quarter to work.

When leadership broadens like this, it usually means more of the market can go up at once, not that the old leaders are done. That's a healthier market than a narrow one, even if it's a less exciting headline.