A reassuring economic outlook and dovish signals from the Federal Reserve are encouraging investors to look beyond the massive growth and technology stocks that have fueled the U.S. stock market´s gains over the past year. Though rallies in stocks such as Nvidia and Meta Platforms have been the market´s main individual drivers in 2024, the financials, industrials and energy sectors are also outperforming the S&P 500´s 9.7% year-to-date gain. That has eased worries that the market was becoming increasingly tied to the fortunes of a small group of stocks. A belief that the economy will remain resilient while inflation fades has prompted investors to look for winners outside of the megacaps. That view received a boost from the Fed earlier this week, when the central bank expressed confidence it would be able to tamp down inflation and cut interest rates this year, even as it raised its forecast for how much the U.S. economy will grow. “There is more confidence that the Fed is going to be able to … get inflation approaching their longer-term targets without a recession,” said Scott Chronert, head of U.S. equity strategy at Citi, which is overweight the technology, financial and industrial sectors. “You are going to take a little bit more comfort that you can own a bank or an industrial if you think the Fed is going to lower rates at some point here.”