• The S&P 500 returned 7.5% in the first quarter of 2023 as bank turmoil rocked financial markets.

• Nvidia, Meta, and Tesla led the way as top gainers of the quarter, while financial names lagged.

• Here are the 10 best- and worst-performing S&P 500 stocks in the first three months of the year.

The S&P 500 gained 7.5% in the first three months of 2023, defying March's bank turmoil sparked by the collapse of Silicon Valley Bank.

It marked a second consecutive quarter of gains, with the index rising 7.6% in the fourth quarter of 2022.

The stock market's strong outing came alongside more interest rate volatility as the Federal Reserve weighed whether to prioritize fighting inflation or avoiding exacerbating the effects of the bank crisis on the economy.

Stocks rallied broadly though as traders increasingly placed bets that the central bank would conclude its rate hike campaign and even begin cutting rates as early as mid year. The Nasdaq 100 entered a new bull market in the last week of the quarter, closing 20% higher than its December low.

Looking ahead, a strong showing during earnings season could bode well for stocks as bears throw in the towel, according to Fundstrat's Tom Lee, who sees the S&P 500 rising 20% in 2023.

However, to JPMorgan strategists, the latest rally in the stock market "makes little sense," as the Fed itself hasn't yet signaled its preparing to cut rates.

Here are the top 10 winners and losers in the S&P 500 in the first quarter.

Biggest winners of the first quarter

1. Nvidia

First quarter return: 90%

2. Meta Platforms

First quarter return: 76%

3. Tesla

First quarter return: 68%

4. Warner Bros Discovery

First quarter return: 59%

5. Align Technology

First quarter return: 58%

6. Advanced Micro Devices

First quarter return: 51%

7. Salesforce

First quarter return: 51%

8. West Pharmaceutical Services

First quarter return: 47%

9. General Electric

First quarter return: 46%

10. Catalent

First quarter return: 46%

Biggest losers of the first quarter

1. First Republic Bank

First quarter return: -88%

2. Zions Bancorp

First quarter return: -39%

3. Charles Schwab

First quarter return: -37%