The Magnificent Seven's September rally is mostly Meta: up 30%, while the other six average 1%

The "Magnificent Seven" have hit record highs this week even as Treasury yields jump. CNBC reported that the Roundhill Magnificent Seven ETF (MAGS) was up 5% for September through Wednesday, well ahead of the S&P 500. It quoted investors who describe the megacaps' cash flow and balance sheets as a haven when both stocks and bonds are under pressure.

The fund's numbers hold up. The idea that the whole group is rallying does not. We checked each stock's closing price from Aug. 31 to Sept. 23 using Nasdaq's price history, and one company accounts for most of the gain.

September, stock by stock

Leave Meta out and the other six averaged about 1% for the month. Three of them, Alphabet, Microsoft and Amazon, were down. Meta's jump came after it unveiled its Muse AI agent, which we covered when the stock rose 11% in a day. That was news about one company. It does not show investors moving into big tech as a group.

The bigger gap: the average stock

The most revealing line in the table is at the bottom. The cap-weighted S&P 500 was flat in September. The equal-weight version, which gives every company the same weight, fell 3.7%. That gap of almost four points means the typical company in the index lost ground while a few very large ones held the headline number up.

Rising yields are the obvious reason. The 10-year Treasury yield closed at 5.11% on Sept. 23, up from 4.75% at the end of August, according to Treasury data. Smaller and more indebted companies feel higher borrowing costs sooner than a cash-rich megacap does.

Thursday's trading followed the same pattern. At 12:54 PM ET, Meta was up another 3.3% and Alphabet 1.3%. Microsoft, Nvidia and Amazon were down. SPY was about flat and RSP was down 0.2%, according to Nasdaq quotes.

What this means for traders

Anyone holding MAGS or a cap-weighted index fund as a hedge against rising rates is mostly exposed to Meta. If the Muse story fades, the rest of the group has so far offered little support. Traders watching market breadth will want to see whether the equal-weight index can stop falling while the 10-year yield stays above 5%. The 10-year sets the tone for everything from mortgages to corporate borrowing costs.

Sources: CNBC; Nasdaq.com price history and quotes; U.S. Treasury. Monthly returns and the ex-Meta average are Chronicle calculations from closing prices, excluding dividends. This is market information, not investment advice.