Key Highlights

  • The Technology Select Sector SPDR Fund (NYSEARCA:XLK) gained 3.52 percent in the week ended September 25, the strongest move among the major sector funds.
  • Meta Platforms (NASDAQ:META) rallied 12.9 percent that week and Microsoft rose 4.53 percent, after a first half in which Microsoft fell 22.5 percent and Meta 14.5 percent, according to First Trust.
  • Nvidia added USD 150 billion to its buyback on September 28, and AMD crossed USD 1 trillion in Market Value on September 21.
  • The Magnificent 7 held 33.4 percent of S&P 500 weight at mid-year, so renewed Leadership raises concentration risk as breadth thins.

How the First Half Went Wrong for the Giants

The rebound follows an unusual first half. First Trust calculated that the Magnificent 7 made up 33.4 percent of the S&P 500 at mid-year, yet three of the seven posted negative returns through June. Microsoft (NASDAQ:MSFT) fell 22.5 percent, Meta 14.5 percent and Tesla 6.5 percent, while Alphabet led the group at 14.3 percent and Nvidia gained 7.4 percent. The three laggards trimmed roughly 2 percentage points from the index, Microsoft alone about 1.42 points. The other 493 stocks contributed about 10.15 points of the 10.2 percent cap-weighted return, and the equal-weight S&P 500 returned 12.1 percent. In short, 2026 began as a broadening story, not a mega-cap one.

The September Catalysts Behind the Rebound

Leadership shifted in the week ended September 25. The Technology Select Sector SPDR Fund (NYSEARCA:XLK) rose 3.52 percent while utilities fell 3.87 percent, and Growth Stocks gained 2.33 percent as value slipped 0.35 percent. Meta Platforms (NASDAQ:META) jumped to USD 751.66 on enthusiasm for its Muse AI agent and its Connect conference. Microsoft rose to USD 516.17, its highest level of 2026, after rebuilding Copilot around Home, Code and Autopilot agents. Nvidia (NASDAQ:NVDA) followed on September 28 with a USD 150 billion buyback increase, lifting remaining capacity to USD 235 billion while its shares trade near their lowest Earnings multiple in about four years. Questar Capital Partners' Richard Reyle said the Mag 7 names are back in vogue.

Not Every Giant Is Moving Together

The rebound is uneven. Amazon fell 1.59 percent, Alphabet 1.61 percent and Broadcom 1.34 percent in the same week that Meta and Microsoft surged. Meta Platforms (NASDAQ:META) then dropped 4.8 percent on September 28 after Goldman Sachs estimated hyperscalers need about USD 300 billion a year in AI services Revenue to break even on AI capex projected near USD 800 billion in 2026, rising to roughly USD 1.1 trillion to USD 1.2 trillion in 2027. Microsoft (NASDAQ:MSFT) alone is spending more than USD 115 billion this year. For 2026, the Technology Select Sector SPDR Fund (NYSEARCA:XLK) is up 35.1 percent as of September 28, second only to energy, while communication services are down 5.6 percent. Investors are paying for visible AI monetization, not size.

Where Things Stand

Partly. Mega-cap tech has retaken short-term leadership, with the Technology Select Sector SPDR Fund (NYSEARCA:XLK) posting the best sector gain of the week ended September 25, but one strong week is not a durable regime. Only 27 percent of S&P 500 members traded above their 50-day moving averages as of September 25, according to Charles Schwab, so the index again leans on a few giants, the reverse of the first-half broadening that First Trust described as the widest since the late 1990s. With the 10-year Yield near 5.21 percent and Nvidia reporting on November 17, durability depends on AI revenue keeping pace with AI spending.