The rally of the Magnificent Seven stocks is losing steam as AI enthusiasm wanes, and investors turn cautious. Concerns about overstretched valuations, AI doubts, and increased competition from lower-rate sectors contribute to the slowdown. Notably, Nvidia's upcoming earnings and recent poor AI product launches have heightened uncertainty. Many investors are shifting towards defensive sectors like energy, real estate, utilities, and consumer staples, seeking safety amid rising volatility and seasonal trading lows.