A shift in market leadership may be forming as Federal Reserve rate cuts begin to restore liquidity, according to two ETF industry executives who see early signs of rotation away from AI-heavy megacaps.
CNBC conveyed the opinions.
Astoria Portfolio Advisors founder John Davi said a series of Fed cuts typically marks “the beginning of a new cycle,” one where capital broadens out rather than clustering around the Magnificent Seven. He noted that emerging-market equities and industrials have already begun to outperform in recent months, signalling investors are diversifying beyond the narrow, AI-driven winners of the past two years.
Davi cautioned against portfolios overly concentrated in US megacaps, arguing that global, multi-asset positioning offers better resilience as the cycle turns.
LionShares CEO Sophia Massie echoed the rotation theme, saying markets may be overestimating the likelihood that a single firm will dominate artificial intelligence. She suggested investors could be under-rewarding opportunities in regions and sectors that stand to benefit from easier policy and a more balanced growth environment.
