Wall Street indexes rallied on Thursday on increasing indications the Republican party’s push for a US tax overhaul may get enough support to pass, while the Dow Jones Industrial Average broke the 24,000 mark for the first time.
The blue-chip Dow index has crossed four 1,000-point milestones this year on the back of strong corporate earnings, robust economic data and hopes for corporate tax cuts.
The market has priced in only a 20-per cent to 40-per cent probability of tax cuts, according to UBS strategists.
A reduction in corporate tax rate to 25 per cent could boost S&P 500 earnings by 6.5 per cent, UBS US equity strategist Keith Parker estimated.
The Dow Jones Industrial Average rose 306.54 points, or 1.28 per cent, to 24,247.22, the S&P 500 gained 21.35 points, or 0.81 per cent, to 2,647.42 and the Nasdaq Composite added 48.85 points, or 0.72 per cent, to 6,873.19, reports Reuters.
The S&P and the Dow were set to post the eighth straight months of gains, while Nasdaq was on track to record five months of increases.
The S&P energy index was rose 1.5 per cent after OPEC agreed to extend oil production cuts to the end of 2018.
Industrials rose 1.4 per cent, helped by a 2-per cent jump in transportation stocks, which would get a big boost from corporate tax cuts.