Wall Street stocks surged to fresh records Tuesday after a key Senate committee advanced the Republican tax cut plan, moving the long-awaited measure closer to the finish line.
All three major US indices set new records, with the Dow Jones Industrial Average finishing up 1.1 percent to close the session at 23,836.71.
The broad-based S&P 500 gained 1.0 percent to end the day at 2,627.04, while the tech-rich Nasdaq Composite Index advanced 0.5 percent to 6,912.36.
Stocks were in positive territory most of the day following a strong report on consumer confidence, and a low-key hearing with Federal Reserve governor Jerome Powell, who is expected to sail to confirmation to replace Janet Yellen as central bank chief.
Markets weakened somewhat on news of a North Korean missile launch, but pushed that aside following a 12-11 party-line vote in the Senate Budget Committee that moves President Donald Trump’s tax cut plan towards a full Senate vote as soon as this week.
The House of Representatives already approved its version of the tax cut, but the Senate has been seen as more of a wildcard.
Jack Ablin, chief investment officer at BMO Private Bank said any sign of progress on the tax reform will give markets a boost.
‘Investors have only baked in about a 50 percent chance of passage, so anything that moves the bill forward is going to be viewed as good news and a positive surprise.’
Banking shares were especially strong, with JPMorgan Chase, Bank of America and Citigroup all gaining more than three percent. The sector is seen as well positioned to benefit from a tax cut and from the move towards easing some bank regulations.
Retail stocks had a good day after the Conference Board reported that consumer confidence held at a 17-year high in November. And the National Retail Federation said the holiday shopping season was on track for sales growth of 3.6 to 4.0 percent compared with last year following a solid Thanksgiving holiday shopping weekend.
Macy’s soared 4.5 percent, Gap 3.3 percent, Target 1.4 percent and Best Buy 1.8 percent.