The Nasdaq-100 index closed July with a 3.2% decline, marking its steepest monthly performance since March 2025.
The sell-off was driven by a sustained rotation out of the so-called Magnificent Seven technology giants, as investors grew increasingly skeptical of the profitability timeline for massive artificial intelligence infrastructure spending.
This marks the fourth-worst July performance for momentum-driven equities in 22 years, signaling a sharp reversal after a strong first half of the year.
The pressure on the tech-heavy benchmark reflects a broader shift in market sentiment.
While the index had previously benefited from a relentless AI trade, recent earnings and guidance from major tech firms have failed to fully justify the scale of capital expenditure.
Consequently, selling pressure broadened beyond individual names, dragging down the wider index despite some resilience in smaller-cap tech segments.