I have a 1080p 144hz monitorWhat resolution and Hz is your monitor?
A lot will depend on your monitor and the games you play. Have you monitored cpu & gpu usage in the games you play?
i have a 500W PSUWhat is your PSU make and model?
At first glance - GPU. But you are limited. An RTX 2070 for example would definitely have benefits but you would potentially be bottle-necking in more CPU intensive games.
i have a 500W PSU
Here is the link to the one i haveMake and model though? It is important because a bad quality 500W will not be able to safely run what a good quality 500W can.
As sizzling says, it depends on what applications you run - thus why I mentioned bottle-necking in CPU intensive games - if you play games where your GPU is your limit, then a GPU upgrade is warranted, but it might not be the case in your situation. If you're mostly using CPU intensive applications, then a GPU upgrade won't really get any benefit.
It just seems at first glance that the GPU initially seems like the logical first choice. But again, it depends.
OK so neither the 7400 or 1060 are what you would recommend for modern AAA games if aiming for high fps to match a high Hz 1080p monitor. Which one is limiting performance is going to depend on the game and the settings you choose. You need to monitor your cpu & gpu usage in game to identify which is limiting you the most.I have a 1080p 144hz monitor