S&P 500, Dow on 6-week winning streak
Wall Street capped a week with no shortage of milestones with a few more Friday.
U.S. stocks closed modestly higher, lifting the Standard & Poor’s 500 index to its fifth record close in a row. The Dow Jones industrial average, which crossed past the 23,000 mark for the first time on Wednesday, also finished the day with its fifthstraight all-time high.
Banks led the gainers Friday. Technology companies also posted big gains, helping to drive the Nasdaq composite to a record high.
The latest milestones came as investors drew encouragement from the Senate’s passage of a budget bill that is expected to ease the path for the White House’s tax cut proposal.
“Market expectations for an impactful tax reform have been running fairly low,” said Mike Baele, managing director at U.S. Bank Private Wealth Management. “That changed a bit today with the Senate passing the budget resolution for 2018.”
The S&P 500 and the Dow are now on a six-week winning streak.
President Donald Trump’s plans to slash corporate taxes and make other business-friendly changes to the nation’s tax laws have helped lift U.S. stocks in recent weeks. Under the administration’s tax plan, the first major overhaul of the tax code in three decades, corporations would see their top tax rate cut from 35 percent to 20 percent.
On Thursday, the Senate narrowly passed a $4 trillion budget resolution that now goes to the House of Representatives. The bill sets the stage for tax legislation later this year that could pass through the Senate without the threat of a filibuster by Democrats. It also adds $1.5 trillion to the deficit over the next 10 years.
Should tax reform pass, it’s also a good bet that interest rates will move higher, which will benefit banks.