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3 months ago
S&P 493: A More Stable Investment Than the Magnificent 7 Amid Trade Risks? (Mar 24, 2025)
Trade Policy Uncertainty and Its Impact on U.S. EquitiesAs trade policy risks continue to escalate, concerns are rising that the Magnificent 7 (Mag. 7) tech giants could be more vulnerable to global economic slowdown and trade barriers. Meanwhile, the remaining S&P 493 stocks—those outside the Mag. 7—may offer relative stability, given their lower dependence on foreign revenue.Lower Foreign Revenue Exposure in S&P 493According to Goldman Sachs, Mag. 7 companies generate 49% of their revenue from international markets, while Nasdaq 100 (NDX) firms have a similarly high exposure of 46%.In contrast,S&P 493 derives only 26% of its revenue from foreign markets, whileS&P 500 (SPX) overall sits at 28%.Russell 2000 (RUT) and S&P MidCap 400 (MID) have even lower foreign revenue exposure at 21% and 25%, respectively—highlighting their more domestic-focused nature.Mag. 7’s Exposure to Global Trade RisksTech giants such as Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, and NVIDIA have significant exposure to international markets, particularly in Asia and Europe. This makes them highly susceptible to any U.S. trade protectionism or geopolitical tensions.On the other hand, S&P 493 companies are more insulated from trade volatility, as they derive a larger share of their revenue from the domestic U.S. economy.Investment ImplicationsWith trade policy shifts potentially driving short-term market volatility, investors should carefully assess the risks associated with high foreign revenue dependence and consider strategic portfolio adjustments toward domestic-focused companies.[Compliance Note]All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
