S&P 500 Hits Record Highs Again, Powered by Magnificent Seven

If you've been watching your portfolio flatline for the past several months, here's some good news: the S&P 500 is back at all-time highs, and you can thank a familiar group of tech giants for the lift. The so-called "Magnificent Seven" — Wall Street's shorthand for the handful of mega-cap tech and growth stocks that have an outsized influence on major indexes — have shaken off their sluggishness and are leading the charge once again.

For much of the past year, these heavyweights were basically treading water, leaving the broader bull market looking a little tired. That matters a lot more than it might sound, because when stocks as large as these stall out, the whole index tends to feel it. Think of them as the engine of a very large bus — if they sputter, nobody's going anywhere fast.

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The comeback is particularly impressive given the obstacles in the market's path. Rising bond yields have been a persistent headache for growth stocks, since higher yields make future earnings look less attractive in today's dollars (that's the jargon-y concept called "discounting," and it basically means expensive stocks get hit hardest). On top of that, stubbornly elevated crude-oil prices have kept inflation fears alive, adding another layer of uncertainty for investors.

Despite those twin pressures, the Magnificent Seven appear to have found their footing again, re-energizing a bull run that was starting to look a little long in the tooth. For everyday investors, this is a reminder of just how concentrated market leadership can be — when a small cluster of companies decides to move, the whole index moves with them. Whether this rally has legs will likely depend on whether those same headwinds — yields and oil — finally start to ease.

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