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Investors braced for a rough August for the S&P 500. But they probably didn’t think it would be this bad — and hurt a small group of stocks so much.
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Massive losses in nine S&P 500 stocks, including Warren Buffett’s favorite Apple (AAPL), Cathie Wood top pick Tesla (TSLA) and Microsoft (MSFT), account for half of the more than $2 trillion suddenly wiped away from investors’ portfolios in August so far. Much of the biggest losses are centered around the mega-tech stocks that carried the market higher in the first half of the year.
“Just look at tech stocks and you can see some traders are throwing in the towel and taking advantage of some of these short-term rates,” said analyst Edward Moya at Oanda.
An August To Forget
August is usually a not-great month for the S&P 500. It’s usually the third-worst month of the year. But August has been worse than usual this year so far.
The S&P 500 this month is down 4.9%. That’s much worse than the average annual gain of just 0.1% during the month of August since 1950, says “Stock Trader’s Almanac.”
And few stocks are spared. Nearly 85% of the stocks in the S&P 500 are down in the month of August so far.
Magnificent Meltdown
The sell-off in many of the so-called Magnificent Seven stocks, dominant technology plays everyone piled into, is catching investors off-guard. Apple is perhaps the best example.
Shares of the $2.7 trillion-in-market-value company are down more than 11% just this month alone. That drop single-handedly wipes out $389 billion in market value, or 18% of all investors’ paper losses on S&P 500 stocks in August.
Investors are increasingly worried they’re paying too much for S&P 500 companies that aren’t growing. Apple trades for 29 times its earnings over the past 12 months, a premium to the S&P 500. And yet, analysts think the company’s profit will fall nearly 1% in the current fiscal year ended in September.
Tesla, another Magnificent Seven stock, is paying dearly during the month, too. Shares are off 7.5% in August so far. That erases more than $167 billion in market value, or nearly 8% of all that’s been lost during the month. It’s a similar story to Apple. Shares are trading for a rich premium of 62 times trailing earnings. And yet, analysts think Tesla’s profit will drop 15% this fiscal year.
Clearly, the month isn’t over yet. So August can still redeem itself. And it’s important to note that most of the biggest market value winners are up this year by an average 63% — even after losses in the past weeks. But for now, investors are paying dearly for jumping into a crowded trade.
Biggest S&P 500 Market Value Losers Month-To-Date
| Company | Symbol | August % ch. | Lost value in August ($ billions) | Sector |
|---|---|---|---|---|
| Apple | (AAPL) | -11.1% | -$376.4 | Information Technology |
| Tesla | (TSLA) | -19.5 | -$164.9 | Consumer Discretionary |
| Microsoft | (MSFT) | -5.5 | -$138.3 | Information Technology |
| Meta Platforms | (META) | -10.9 | -$89.7 | Communication Services |
| Nvidia | (NVDA) | -7.2 | -$82.7 | Information Technology |
| Alphabet | (GOOGL) | -4.0 | -$70.0 | Communication Services |
| Broadcom | (AVGO) | -8.0 | -$29.8 | Information Technology |
| JPMorgan Chase | (JPM) | -5.7 | -$28.6 | Financials |
| Qualcomm | (QCOM) | -16.6 | -$24.2 | Information Technology |
Sources: S&P Global Market Intelligence, IBD
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