Wall Street extends gains on tax reform framework

On Wednesday, major equity indexes in the U.S. recorded considerable gains led by financial shares, which were boosted by US President Donald Trump's tax reform proposal and heightened expectations that the Fed would hike rates in December.

In a speech in Indiana, Trump said that his administration's tax reform would be the biggest overhaul in three decades and would be aimed at helping the working middle-class Americans and creating more jobs.Commenting on Trump's announcement, “for the first time since we have had Trump and the administration in office, it looks like there is incrementally more of a possibility of tax reform going through that would actually be meaningful,” Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta, Georgia, told Reuters.

In the meantime, despite some dovish comments from St. Louis Fed President Bullard, the CME Group FedWatch Tool's rate hike probability for December edged higher to 81.4%, boosting rate-sensitive financial shares. Fueled by gains in Bank of America (+2.42%) and Goldman Sachs (+2.1%), the S&P Financials Index .SPSY closed the day 1.3% higher. Moreover, the barrel of West Texas Intermediate settled above the $52 handle on Wednesday on a larger-than-expected crude oil inventory drawdown in the U.S., allowing the S&P Energy Index .SPNY add 0.5%. 

The Dow Jones Industrial Average gained 56.83 points, or 0.26%, to 22,341.15, the S&P 500 added 10.32 points, or 0.41%, to 2,507.16 and the Nasdaq Composite rose 72.87 points, or 1.14%, to 6,453.03.

Headlines from the NA session:

• US Pres. Trump: First $12K of income earned by a single individual will be tax-free
• US Pres. Trump: Going to cut taxes for middle-class, make tax code fairer and simpler
• Overview of President Trump's tax proposal
• US Dollar pares gains, remains above 93 handle
• Fed's Bullard: Current level of policy rate is appropriate given current macroeconomic data
• BOC's Poloz continues to speak: temporary factors holding down inflation will dissipate
• US Home Sales have lost considerable momentum - Wells Fargo
• US Durable Goods Orders: Positive momentum heading into year-end - Wells Fargo
• WTI bid above $52.00 on EIA
• EIA: US commercial crude oil inventories decreased by 1.8 mln barrels