Is the ‘great equity rotation’ finally coming?

The potential start of an equity rotation away from the "Magnificent Seven" towards the broader market may have begun on July 10, spurred by a strong CPI print and anticipated Fed rate cuts. This shift could force investors to rebalance portfolios, favoring more diversified and smaller-cap investments. The earnings growth gap between the "Magnificent Seven" and other stocks is closing, and a small-cap rally is expected post-US election.