The chief market technician at Piper Sandler, Craig Johnson, recently shared his thoughts on the evolving market trends. He noted that the market is expanding beyond the Magnificent 7.

What Happened: During his appearance on CNBC's "Squawk Box" on Friday, Johnson stressed the importance of understanding the market's composition, including the balance among large, mid, and small cap stocks. He also acknowledged the robust quarterly earnings results of Nvidia Corp. (NASDAQ:NVDA).

Johnson advised not to overanalyze the market, but to consider its makeup. He noted that the Magnificent 7 stocks, which includes Nvidia, Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), Microsoft Corp. (NASDAQ:MSFT) and Tesla Inc. (NASDAQ:TSLA) are not reaching highs as they used to.

"You can actually find better looking stocks in the mid cap world that look a lot more constructive. That sort of change is happening. This is a market that's broadening out, it doesn't have to be led by the Mag 7," Johnson said.

Why It Matters: Despite Nvidia's impressive second-quarter earnings, which surpassed expectations by 6.25%, the company's stock dipped 3.6% in after-hours trading.

The market mood seemed to be settling after Nvidia's earnings announcement. The index futures were higher in early trading, and Nvidia shares were recovering from their early premarket session losses.

Analysts have suggested that the pullback in Nvidia's stock presents a buying opportunity. The company's robust data center performance and above-consensus revenue forecast for the third quarter were among the factors that contributed to this outlook.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari