Bank Stocks Lead U.S. Stock ETF Bounce

“Everybody remembers the [year]2000 slipping of the tech sector. But I have no concerns about tech valuations,” Jae Yoon, chief investment officer at New York Life Investment Management, told the Wall Street Journal, noting that in terms of price-to-earnings metrics, the sector is trading much closer in line to the S&P 500 than it did at its peak.

Related: Concerns Over Tech Valuations Drag on U.S. Stocks

The S&P 500 is currently trading at around 18 times forward earnings estimates, compared to its long-term average of 15 times, which has many fearful of a short-term correction, especially in a seasonally weak period for equities. However, some market observers argued that as long as we continue to see strong earnings come out of U.S. companies, the market’s run may still have legs.

“Valuations are certainly a little bit elevated and they are a bit of a concern,” Randy Frederick, vice president of trading and derivatives for Charles Schwab, told Reuters. “We saw valuations run up in the first quarter but then when earnings came out they were pretty solid so ultimately if earnings continue at the rate we’ve seen recently, then those valuations will be fine.”

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