Apple and Nvidia tank as 'Magnificent Seven' tech stocks take a battering

• Shares in the "Magnificent Seven" tech giants fell on Monday amid a global sell-off.
• Nvidia's share price dropped by almost 8% soon after the market opened.
• Underwhelming earnings reports and doubts around the AI boom have worsened investors' outlook on tech.

Shares in the so-called "Magnificent Seven" tech giants plummeted on Monday as fears of a US recession triggered global market disruption.

As of around 9.50 a.m. ET, Nvidia shares declined 7.7%, and Tesla was down 5.8%. In pre-market trade, the two tech giants had fallen by more than 15% and 18% respectively.

On Monday morning, the remaining five mega-cap tech companies, Apple, Alphabet, Microsoft, Amazon, and Meta, were all hovering at declines between 3% and 5%.

Tech stocks were first hit at the close of last week after higher-than-expected unemployment levels triggered a sell-off in US markets amid concerns that the country's economy was headed for recession.

The declines were compounded by disappointing quarterly earnings reports from big-cap tech companies, driving down investors' hopes for quick returns on their AI investments.

Tesla missed its earnings expectations and lowered annual earnings forecasts by more than four percentage points, while Apple reported declining iPhone revenue for the third quarter.

Nvidia does not report earnings until the end of August, but sales remain strong. However, the company is at the center of fears over an AI bubble, given its stronghold over critical semiconductor production.

Confidence in Nvidia dipped sharply following a report by The Information on Friday that revealed it could delay delivery of its AI chips by up to three months.

The pessimism driven by earnings brought the Nasdaq composite officially into correction territory on Friday, dropping more than 10% below its July 10 peak.

The combined value of the "Magnificent Seven" is now below $15 trillion, down from a peak of $17 trillion in July.

The tech sector's market volatility was set to continue on Monday, with the Nasdaq Composite down 4.28%.