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Wall Street surged to record highs on Tuesday led by sharp gains in bank stocks, and boosted by progress for a tax cut Bill, strong consumer confidence data and encouraging comments from President Donald Trump's nominee to lead the Federal Reserve.
The S&P financial sector soared 2.6 per cent, its biggest daily percentage increase since March 1. JP Morgan rose 3.5 per cent and Bank of America gained 3.9 per cent, while the S&P 500 banks index jumped 3.3 per cent.
Trump's push for a big package of tax cuts moved past a potential obstacle as a Senate panel approved the measure despite lingering concerns from some Republican members.
Wall Street is closely watching progress on the Republicans' tax-reform efforts, with hopes that corporate tax cuts will further fuel the record-setting rally for equities.
People are trying to move in front of what they think now is likely to be some tax reform on the corporate side,” Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
The Dow Jones Industrial Average rose 255.93 points, or 1.09 per cent, to 23,836.71, the S&P 500 gained 25.63 points, or 0.99 per cent, to 2,627.05 and the Nasdaq Composite added 33.84 points, or 0.49 per cent, to 6,912.36.
All three indexes notched record closing highs.
The small-cap Russell 2000, which is viewed as a barometer for tax reform's chances, rose 1.5 per cent and also tallied a record closing high.
In testimony before a Senate committee, Jerome Powell, nominated to replace Janet Yellen as Fed chair, defended the need to potentially lighten regulation on the financial sector.
Powell overall presented himself as an extension of the Fed policies set under Yellen and her predecessor Ben Bernanke, confirming market expectations that he offered stability despite the change in Fed leadership.
Data showed that US consumer confidence surged to a near 17-year high in November, driven by a robust labor market, while house prices rose sharply in September in the latest encouraging reports about the US economy.
“Some of the data that we got today kind of confirms this goldilocks environment that we have,” said Anthony Saglimbene, global market strategist at Ameriprise in Troy, Michigan.
“Unemployment and interest rates are low, confidence and asset prices are high.”
Major indexes briefly pulled back from session highs after news that North Korea had fired a missile, before they rebounded.
In corporate news, Buffalo Wild Wings shares rose 6.3 per cent after Roark Capital Group said it would buy the chicken wing restaurant chain.
Advancing issues outnumbered declining ones on the NYSE by a 2.16-to-1 ratio; on Nasdaq, a 1.88-to-1 ratio favoured advancers.
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