US stocks rally on renewed confidence over tax reform

US stocks roared higher on Thursday after Steven Mnuchin, the US treasury secretary, said that he expects the Trump administration to reveal its tax reform proposal “very soon”.

Mr Mnuchin had just days ago tempered his stance on tax reform — one of the Donald Trump campaign promises that has been most enticing to Wall Street — saying to the Financial Times that it us “unlikely” for a plan to be passed by August.

However, Mr Mnuchin’s remarks to reporters in Washington helped renew investor enthusiasm that the administration will not find itself bogged down by the fight over repealing and replacing Obamacare.

Economically sensitive stocks posted the biggest gains. Financials were up 1.8 per cent, while industrials climbed 1.3 per cent. Utilities, telecommunications and consumer staples, all defensive stocks, lagged behind.

Overall, the broad S&P 500 was up 0.8 per cent to 2,355.9, the Dow Jones Industrial Average climbed 0.9 per cent to 20,578.7 and the Nasdaq Composite gained 1 per cent to 5,923.3.

The materials sector also got a lift after Mr Trump launched an investigation into US steel imports.

Fixed-income markets joined the rotation towards risky assets. The 10-year Treasury yield climbed 0.037 percentage points to 2.2391 per cent as investors sold the haven asset.

Oil prices slipped for another day. US crude oil was down 0.3 per cent to $50.27 a barrel, while Brent crude declined 0.1 per cent to $52.85.

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