Fed Minutes: Market is optimistic about the AI prospects of large tech stocks, while small-cap valuations remain below average.

[Block Rhythm] On August 21, the Fed released the minutes of the July meeting, which mentioned that the recent rise in stock prices and the narrowing of credit spreads indicate that the market believes the overall U.S. economy remains resilient; however, financial markets seem to have begun differentiating companies based on their profit size and quality.

The valuation of the S&P 500 index continues to be above the long-term average, mainly due to the market's optimistic expectations for the potential benefits that large tech companies may gain from further applications of artificial intelligence (AI). However, despite a rise in valuation during the interim period, the small-cap stock index remains below historical average levels.