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.