Three months into 2025, the U.S. IPO (initial public offering) market remains in a rut. Why? And, perhaps just as importantly, is a rebound still possible?

Managers are cognizant of potential risks to portfolios, identifying dominant Chinese component manufacturers, North American automotive supply chains, and smaller cap industrial cyclicals as market segments worth monitoring.

The Magnificent Seven stocks (Microsoft, Apple, Alphabet, Amazon, Nvidia, Meta, and Tesla) have been the largest driver of equity returns in recent years and were again the dominant contributors in 2023, accounting for more than half of the market increase.

Interest rates are one of the most important factors affecting the economy and the outlook for stocks. Managers increasingly think interest rates in the U.S. have likely peaked and are repositioning equity portfolios for the new environment.