U.S. equities and stock exchange traded funds jumped to new heights after President Donald Trump promised he would soon make an official announcement that would be “phenomenal in terms of tax.”
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.60% higher Thursday.
Equities markets initially rallied on upbeat earnings numbers released prior to the opening bell and continued to gain momentum after Trump told airline executives in a White House meeting that he would make an announcement that would be “phenomenal in terms of tax” within the next three weeks, the Wall Street Journal reports.
“Lowering the overall tax burden on American business is big league,” Trump said in a meeting with airline executives, Reuters reports.
Leading the charge, the financial sector climbed on the remarks, with the widely observed Financial Select Sector SPDR (NYSEArca: XLF) up 1.2%.
“Stocks are ripping because of President Trump’s comments,” R.J. Grant, director of equity trading at KBW Inc., who said he noticed a pickup in the S&P 500 and financial shares “almost exactly when those comments hit the tape.”
Trump also revealed to airline executives that he will cut regulations and fund infrastructure upgrades, which he argued would help their companies hire more workers.
U.S. equities have strengthened since Trump’s election day win on hopes that the new administration would enact policies to stoke economic growth and bolster corporate profits. While the Trump trade has stalled in recent weeks as the markets have patiently waited on the new president to clarify his positions, equities are finally pushing higher on election campaign promises that Trump is beginning to make good on.
“We’re finally seeing some of the proposed policies being put into place,” Chris Gaffney, president of world markets at EverBank, said told Reuters.
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