The main U.S. stock indexes hit record intraday highs on Monday, led by financials and industrials, as the so-called “Trump trade” sparked back to life on renewed optimism about the economy.
The three main indexes closed at record highs on Thursday and Friday rose after President Donald Trump vowed to make a major tax announcement in the next few weeks.
The S&P 500 .SPX has surged 8.3 percent since Trump’s Nov. 8 election through Friday’s close, fueled by expectations he will lower corporate taxes, reduce regulations and increase infrastructure spending.
While the rally had stalled amid concerns over Trump’s protectionist stance and lack of clarity on policy reforms, the S&P 500 has not dropped more than 1 percent in 84 trading days, indicating investors were giving Trump the benefit of doubt.
Investors were also comforted by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without Trump talking tough on trade, currency and security issues.
The Japanese yen, the demand for which rises when risk appetite falls, was the biggest underperformer among major currencies. World stocks rose, with Asian shares rallying to a 1-1/2-year high.
Global markets are following the leader (U.S. stocks) after the resurgence of the “Trump trade”, Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
At 9:38 a.m. EDT the Dow Jones Industrial Average .DJI was up 91.51 points, or 0.45 percent, at 20,360.88.
Six of the 11 major S&P sectors were higher, with financials .SPSY and industrials .SPLRCI gaining the most. The two sectors are seen benefiting the most from Trump’s policies.
Telecom stocks .SPLRCL were down the most, 1.4 percent, due to a 1.3 percent drop in Verizon (VZ.N) after the network carrier said it would reintroduce its unlimited data plan.
Apple (AAPL.O) was the top stock on the S&P and the Nasdaq, rising 1 percent and closing on its record high after Goldman Sachs raised its price target on the stock.
Chemours (CC.N) rose 14 percent after the company and DuPont (DD.N) said they had agreed to pay about $671 million in cash to settle several lawsuits related to the leak of a toxic chemical. DuPont’s stock was up 0.5 percent.
Advancing issues outnumbered decliners on the NYSE by 1,987 to 691. On the Nasdaq, 1,784 issues rose and 623 fell.
The S&P 500 index showed 44 new 52-week highs and no new lows, while the Nasdaq recorded 94 new highs and six new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)