Good morning, investors. The earnings tidal wave kicks off today and we’ll get a nonstop flow of quarterly numbers through the end of the week. The Magnificent 7 are still carrying the market’s earnings strength, but the widening performance gap within the group is worth unpacking.

Apple just hit a new record high while three of its Magnificent 7 peers sat in bear markets.

That combination has happened on four trading days since the group took on its moniker and each instance came in 2026.

Fifty-five percentage points now separate the best- and worst-performing Magnificent 7 names year-to-date, but the gap itself is not a novel development.

Rather, the number of losing picks in the batch seems to be trending higher with every year of the AI trade.

At roughly the halfway point in 2023, Nvidia was up more than 200% and led the weakest Magnificent 7 name by 176 percentage points, though all seven names were still positive year-to-date.

Then, only one was negative at this date in 2024, two in 2025, and there are currently three for 2026.

Notably, the leading Magnificent 7 stock each year has seen its winning year-to-date return compress:

Cumulative annual returns for the group, too, have seen a similar decline.

These numbers suggest that Wall Street is actively repricing AI spending as a negative catalyst rather than a positive.

Microsoft, for one, guided to nearly $200 billion in capital expenditures this year — up more than 60% from the prior year — and the stock has dropped 20%.

Meta raised its 2026 capex range to $125-145 billion and shares have fallen 10%.

Alphabet reported its first-ever negative free cash flow quarter last week as it raised its full-year capex forecast to $205 billion on the high end. That stock has fallen nearly 20% from its all-time high.

Apple, meanwhile, has sat out the capex boom and it’s now the top-performing stock with a 24% return year-to-date.

To be sure, the Magnificent 7 have diverged before and closed the gap within a few months.

Five of the seven entered bear markets in April 2025 and each one recovered by that September.

Microsoft and Meta report earnings after the bell Wednesday. Apple and Amazon follow Thursday.

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🍎 Apple hit a a new record high. The rally pushed its market cap near $4.95 trillion and above Nvidia once again. It’s surged more than 20% since late June. (Investing.com)

🛢 Oil fell 9% as the US-Iran pause moved into a second week. Brent crude sank to about $88 a barrel and WTI to about $83 as traders priced out the war-risk premium after Tehran said it would suspend attacks. (CNBC)

🏦 Traders see one-in-three shot the Fed hikes rates by 25 basis points on Wednesday. CME FedWatch has 66% for a hold and 34% for a hike heading into the July FOMC and no probability of a cut. (Yahoo Finance)

🚀 Three of the four biggest earnings of the year fall within a 48-hour window. Microsoft and Meta report Wednesday after the close and Amazon and Apple report Thursday. (Yahoo Finance)

🗓 July 28, 2005: Lawmakers passed the Central America Free Trade Agreement, which opened tariff-free access between the US and six Latin American economies.

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