The market rally isn't just the Magnificent Seven anymore

Don't look now, but a wider swath of stocks are joining the upswing.

Why it matters: It bodes well for growth that an increasing number of stocks — including small caps and so-called cyclical companies closely tied to immediate ups and downs of the economy — are showing signs of life.

The latest: The benchmark S&P 500 ended last week up about 0.7%, led by health care, energy and financial shares.

• Among the Magnificent Seven — Apple, Amazon, Alphabet, Microsoft, Meta, Nvidia and Tesla — only Apple outperformed the index, as ugly earnings from Tesla and perhaps an ever-so-slight easing of AI hype weighed on these massive companies.

Be smart: The colossal market caps of the Magnificent Seven mean their price swings heavily influence the market-cap-weighted S&P 500.

Yes, but: The non-magnificent, non-mega-sized segments of the stock market did quite well last week, continuing a recent trend of outperforming the giant tech stocks that first led the year's gains.

• The Russell 2000 index of small-cap stocks rose about 1.6% last week.
• The S&P 500 equal weight index, which strips out the influence of giant companies, was also up roughly 1.6% — over twice the gain of the market cap-weighted index.
• The tech-heavy Nasdaq composite index was down 0.6% for the week.

🗣 What they're saying: The market rally is broadening.

• "The S&P 500 has broadened out since May and we expect this to continue," wrote BofA market analysts in a note on Friday.
• "Over the past few weeks, the equity rally has broadened considerably. Investors are now looking for value outside the 'Magnificent Seven,'” wrote market analysts with Interactive Brokers last week.
• "Broadening participation is holding up as 70% of S&P 500 stocks are trading above their 200-day moving average," wrote NYSE analysts on Friday.

The bottom line: This is a good sign both for the economy and for the durability of what increasingly seems like a real bull market.