Investor caution grows as Big Tech dominates stock market gains.

Some investors are concerned that the biggest tech and growth stocks in the US market may be overvalued, despite better-than-expected earnings reports. The Nasdaq 100 has rallied 19% this year, with Apple, Microsoft, Alphabet, and Amazon posting an average gain of about 27%. However, valuations have ramped up, with the price-to-earnings gap between the Nasdaq 100 and the S&P 500 recently hitting its widest since early 2022. Some market participants are underweight the tech sector due to concerns about valuations and the expectation that the Fed will keep rates high to fight inflation.