Wednesday was a good day for the financial sector as markets pulled for stocks here, indicating favorable investors sentiment. The SP 500 touched its largest single- day gain over a period of two months on Wednesday and the NASDAQ matched pace by posting its best day figures over a period of eight months. It was not just financial sector stocks that helped the indices post good performances but also technology stocks.

The actual numbers behind the improvement

At the end of the day on Wednesday, the S&P 500 stood at 2440.69, posting a 0.9% improvement. In points, the change was 21.31, the largest it has shown since the 24th of April. The main contribution to this upward movement came from financial stocks which gained 1.6%, keeping pace with long- term Treasury yields.

10 year Treasury bonds reflected a yield improvement of 2.22%. While this is not the highest for the month, it is close enough as the yield had just touched a month high figure in the previous session.

Tech stocks regained lost ground from the previous sessions and ended the day at a 1.4% improving, thus showing that the rebound was sustainable.

Investor mindset positive

The improvement in treasury bond yields translates into better spreads for banks on tier loans and this is a big positive factor for financial entities that can shore up their stock value for some time in the future too. Expectations that a tax cut may be in the offing have further given cause for investor positivity in this week. There have also been predictions from experts that the U.S. economy will pick up in the coming weeks and this has added further to the positive investor mindset.

On the downside, elevated valuations are giving investors some cause for concern. There is some anxiety about whether valuations can be taken into account completely to decide on financial futures and to make investment decisions. In the tech sector, these concerns are allayed by the expert opinion that some dips are inevitable yet the sector remains robust in spite of the fact that this sector has not performed very well in recent times.

The delay in voting for the new health care bill kept the market quite subdued on Tuesday and gave investors some reason for concern. However, it appears that the market has shrugged off the concerns now and is moving ahead full speed.