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Big tech stocks like Amazon and Apple drove key indexes to new highs on Wednesday, indicating to analysts that investors are putting their money into risky assets in quest of market returns as stock valuations return to all-time highs.

Jeff Bezos, the creator of Amazon.com, stepped down as CEO this week but continues to serve as executive chairman.
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Despite snapping a seven-day winning run, the S&P 500 rose 0.3 percent to 4,358 points on Tuesday, topping a Friday closing high and extending year-to-date gains to about 18 percent.

Meanwhile, the Nasdaq, which is heavily weighted in technology, rose 1 point, extending a record close from Tuesday and setting a new intraday high above 14,755 points.

Apple and Amazon were among the mega-cap companies leading market gains and setting new record finishes on Wednesday, rising 1.8 percent and 0.6 percent, respectively.

Stocks in cyclical sectors such as travel and energy, on the other hand, continued to underperform amid tech’s comeback, with Carnival Cruise Lines, Enphase Energy, and American Airlines leading the S&P’s losses, losing 4%, 3.5 percent, and 3%, respectively.

Treasury yields, which had risen earlier this year and scared investors away from tech stocks, fell 3 basis points Wednesday, reaching their lowest level in five months, ushering in the broad gains.

“Investors were forced back into riskier assets Wednesday as the bond market surge sent Treasury yields dramatically lower,” said Oanda Senior Market Analyst Edward Moya soon before the market closed.
Officials from the Federal Reserve said Wednesday afternoon that they have begun discussions about when they should lessen their pandemic-era policy measures, but that they are still satisfied with their efforts to boost the economy and have no plans to begin tapering efforts. The Fed has been buying back $120 billion in bonds every month since March 2020 to boost economic development by injecting money into the market.
The earnings season begins next week, with a wave of big bank reports, including Goldman Sachs and JPMorgan Chase, on July 13.
“Stock valuations have become a general concern as a result of this bull market’s strong start,” LPL Financial analysts wrote in a report last week, predicting the S&P will only rise roughly 3% in the second half of the year. “More optimism is priced in after a huge rally, and that higher bar then opens the door to disappointment.”
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