US stocks close higher as solid data, earnings offset valuation fears

US stocks rebounded on Wednesday as jitters over inflated tech stock valuations abated and upbeat earnings and better-than-expected economic data fueled investors’ risk appetite.

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A broad rally sent all three major US equity indexes higher on the day, with a bounce-back in tech and tech-related momentum stocks leading the charge.

But the rally lost some momentum after JPMorgan Chase Chief Executive Officer Jamie Dimon told Reuters that asset prices are quite high and there is always a risk of markets going down.

Technology and artificial intelligence-related shares have muscled the stock market to record-breaking highs in recent months, leading to worries of inflated valuations and prompting Wall Street executives to issue pullback warnings. Those worries came to a head on Tuesday, when the S&P 500 and the Nasdaq posted their largest single-day percentage drops since Oct. 10.

Even so, investors viewed the selloff as healthy profit taking.

“Valuation concerns are very legitimate and a 10% to 15% short-term correction is something that should be anticipated at any time,” said Oliver Pursche, senior vice-president at Wealthspire Advisors, in New York.