Is the stock market in correction territory? It depends on what you mean by stock market.
The Dow Jones Industrial Average (^DJI +1.24%) and the Nasdaq Composite Index (^IXIC +2.02%) are indeed in correction. But, perhaps surprisingly, the S&P 500 (^GSPC +1.46%) isn't (at least as of the market close on Friday, March 27, 2026).
Over the last few years, the so-called "Magnificent Seven" stocks have fueled the S&P 500's impressive gains. However, all seven stocks have plunged by double-digit percentages year to date. If the Magnificent Seven isn't preventing the S&P 500 from slipping into correction territory, which stocks are? Five stocks especially stand out.
Image source: Getty Images.
Two energy giants
Energy stocks have been sizzling hot in 2026. Oil and gas prices skyrocketed following the U.S. and Israeli attacks on Iran. With Iran effectively blocking passage through the vital Strait of Hormuz, commodity prices have remained high. Unsurprisingly, the energy sector is the only S&P 500 sector to deliver double-digit year-to-date gains.
Fortunately for the S&P 500, two energy giants among its top 20 largest components have been huge winners. ExxonMobil (XOM 3.96%) has the 13th-highest weight in the S&P 500. Chevron (CVX 3.88%) has the 19th-largest weight. Both stocks have soared around 40% so far this year.
NYSE: XOM
Key Data Points
While ExxonMobil and Chevron both operated huge integrated oil and gas operations, their businesses are somewhat different. ExxonMobil's upstream oil production is now significantly more profitable thanks to higher oil prices. Chevron benefits from these high prices as well, but it's also attractive as the largest U.S. natural gas producer.
Two consumer staples leaders
Inflation was already a concern before the Iran conflict. With oil prices rising, it's an even bigger worry. Higher fuel costs could push up prices across a wide range of products. That's bad news for most stocks. However, it can actually be good news for top consumer staples stocks like Walmart (WMT 0.54%) and Costco Wholesale (COST 2.05%).
Walmart's and Costco's businesses have historically been relatively resistant to inflation. Consumers who are tightening their purse strings still shop at Walmart and Costco stores because they know both companies offer low prices. Investors know this, too. That's a big reason why Walmart's and Costco's stocks were up by more than 10% year to date as of the end of last week.
NASDAQ: WMT
Key Data Points
These gains have helped prop up the S&P 500. Walmart sits just outside the index's top 10 components at No. 11, while Costco isn't too far behind at No. 17.
One notable outlier
It makes sense that energy stocks and consumer staples stocks are faring well in the current environment. However, there's one notable outlier from a surprising sector that's also a key factor behind the S&P 500 avoiding a correction thus far -- Micron Technology (MU +4.04%).
NASDAQ: MU
Key Data Points
Despite a significant recent pullback, Micron's shares remain up by an impressive amount year to date. The company's high-bandwidth memory (HBM) is a critical component for artificial intelligence (AI) infrastructure. So is its NAND flash memory. Micron is enjoying unprecedented pricing power in memory due to extraordinarily high demand for AI chips.
Unlike the Magnificent Seven stocks, Micron's valuation wasn't sky-high before the Middle East turmoil began. It still isn't, with shares trading at only 7.6 times forward earnings. Micron is the highest-weighted tech stock outside the Magnificent Seven and Broadcom (AVGO 0.52%) in the S&P 500, ranking No. 20.
Goodbye Magnificent Seven, hello "Foundational Five"?
Has the Magnificent Seven era of the S&P 500 giving way to the "Foundational Five" era featuring ExxonMobil, Chevron, Walmart, Costco, and Micron? I wouldn't go that far.
Should a peaceful resolution be reached among the U.S., Israel, and Iran, oil and gas prices would likely fall -- along with ExxonMobil's and Chevron's stocks. A "risk-off" climate could also cause investors to shift away from safe-haven stocks such as Walmart and Costco into other alternatives. Meanwhile, Micron's luster appears to be fading amid fears that technological advances could reduce demand for its memory chips.
Also, these five stocks haven't prevented an S&P 500 correction on their own. The index includes over 100 other stocks that have also delivered gains of 10% or more this year.
Most importantly, though, I don't think the S&P 500 is anywhere close to being out of the woods yet. It's still quite possible that the index slips into correction territory (perhaps even by the time you're reading this).
If there's a takeaway for investors, it's that portfolio diversification matters. The stocks that drive the market one year might not be the ones that do so the next.
