much larger S&P 500 to record highs this week.# There are several reasons fo investors' assessments of the economy right# now and where it will be in the months ahead.

We're going to break this# all down now with David Gura,## business correspondent for NPR, who's# been David, it's great to have you here.

So how much is the market rally connec investors' expectations that the Fed# is going to cut rates pretty soon?

DAVID GURA, NPR Business Correspondent:# Yes, it's hugely tied to that, Geoff.

And we got this indication last year# from the Feder looking to make cuts in 2023.

There's been some# recalibration IN recent da how soon markets think the Fed is going# to actually do that, lower those rates.

But they're looking around, investors are# looking around and seeing a bevy of economic## indicators that are looking pretty strong.

And# they have this belief that the Federal Reserve,## despite what seemed like small odds at the# beginning of last year, the year before,## are going to be able to engineer# this so-called soft landing,## that they're going to get high inflation# under contro And that's certainly buoying# the stock market.

Now,## I should say the gains haven't been widely# wh ich ended up being a much stronger year for# stocks than I think a lot of peop in light of what I was just talking about, that# being this fear that we could hit a recession.

So we haven't had broad-based gains,# but stocks have performed much better,## I think, than Wall Street expected# at the beginning of last year.

GEOFF BENNETT: And there's also a lot of investor# How has the promise of A.I.

reordered the markets## and really fueled the returns of the# so-called Magnificent Seven?

These## are the high-performing tech companies# whose stocks typically do really wel DAVID GURA: Yes, Geoff, this was# a huge turning point last year.

So you mentioned the Magnificent Seven.

This# wh o's an investment strategist at Bank of# America.

He allowed that he's a fa Western movie from 1960 starring Yul Brynner# and Eli Wallach, which is why he named them.

But the seven stocks are Alphabet,# Amazon, Apple, Meta, Microsoft, Nvidia,## and Tesla.

And as you say, these are tech# companies, most of which are tied to A.I.

or## interested in A.I.

or doing work on A.I.

I guess# Tesla is kind of the exception to that.

Nvidia,## at the other extreme, this is a company that is# designing most of the microchips that are used## in the supercomputers that are powering the# technology that allows companies to use A.I.

So they have really outperformed the market.

Last# year, the S&P 500 was up 24 percent.

Those seven## stocks, they rose by more than 100 percent# last year.

So they have been carrying a lot## of the weight here.

And there are a number# of reasons for that.

A.I.

is pa Another just has to do with the fact that these# are companies that are ingraine that we use every day, that they would have# staying power if there were going to be some## sort of economic downturn.

And, finally,# they have a lot of cash on hand.

a point where interest rates are higher# than they were for a really long time.

A lot of companies, if they want# to expand, have to borrow money.## They'd have to borrow money at a higher# interest rate.

These that wouldn't have to do that because# they have so much money on GE OFF BENNETT: And yet there are these# influential voices injecting notes of caution,# namely J.P. Morgan CEO Jamie Dimon,# who says, look, there are all sorts## of financial and geopolitical risks on the# horizon.

Here's what he said to CNBC earlier.

JAMIE DIMON, Chairman, J.P. Morgan Chase: I think## it's a m it's kind of like this little drug# we all feel.

Like, it's just great.

But, remember, we have had so much fiscal# monetary stimulation.

So I'm a on the question side, that we are facing a lot of# things in '24 or '25.

And we mentioned Ukrain the terrorist activity in Israel,# the Red Sea, quantitative tightening,## which I still question if we understand# exactly how that works.

I don't think we do.

GEOFF BENNETT: I mean, he's got a point.# Why isn't the market apparently taking## into account a host of geopolitical crises# and the shipping challenge it and all of the knock-on effects to the# stock market and the economy, potentially?

DAVID GURA: It's a really good question,# Geoff.

And I think that these are all## things that are worrying to some investors.

I# think they we have been able to get through a lot# of tumult and crises in re But Jamie Dimon stands out as the head# of the largest bank in this country and## somebody who is more frank and forthright# about the prospect of these risks than I## think a lot of executives are.

You heard# him there mentioning Ukraine, the war in## Israel.

These are topics that he returns to# time and time again, because he is sor looking at history with a really broad breath# and fearing that this could have a big eff not just on the economy, but on sort of the# geopolitical system in the world as well.

So he's raising alarm about this.

I think a lot# of people listen to Jamie Dimon, again, because## he's running such a large institution.

But so far,# we have seen markets kind of sh look at what's happening in the Red Sea.

We have# seen shipping companies pull their ships out of## that waterway, send them on a 10-day journey# around Africa to avoid that conflict there.

We're beginning to see effects of this# tumult.

And I think it's something that,## of course, Wall Street is going to continue# to watch here in the days an GEOFF BENNETT: And we should be clear.# The stock market is not the economy.

But you could argue that, because of# a number of fa Wall Street is really intertwined# with what happens on Main Street.

Do you see it that way?

DAVID GURA: Yes, it's important What we're seeing right now in the# stock market is confirmation of the## fact that the economy is doing pretty well,# again, better than I think a lot expected it would be.

So you look at the# data points that we have gotten recent look at retail sales.

Those came in# stronger than expected.

We're go get some figures on GDP, on growth later# this week, another ind We have seen the labor market remain really# strong and resolute.

What we're seeing is## the market really embrace each of those# economic data points, Geoff.

It's kind## of confirming this sentiment, this sense that# the economy is doing well.

And as we sa big survey of consumer sentiment last week, a# lot of people, yes, investors, but consumers,## the rest of us as well, are feeling more# confident in the direction of the U.S. economy.

GEOFF BENNETT: David Gura of NPR.

David, always great DAVID GURA: Geoff, thanks.