U.S. equities and stock exchange traded funds strengthened Wednesday as concerns over North Korea’s latest saber rattling took a back seat to improving U.S. economic growth data.
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 up 0.5% Wednesday, bouncing back above its short-term, 50-day simple moving average.
Supporting U.S. market gains, the Commerce Department revealed gross domestic product increased at a 3% annual rate in the second quarter, its fastest pace in over two years, Reuters reports. The numbers were upwardly revised from the 2.6% pace reported last month, which reflected robust consumer spending and stronger businesses investment.
Additionally, payroll processor ADP calculated that U.S. private employers added 237,000 jobs in August for its largest monthly increase in five months, compared to economists’ expectations of 183,000 jobs added.
Related: U.S. Stock ETFs Shaken But Not Stirred by North Korea
Further adding to the positive momentum, investors were waiting on President Donald Trump to provide clarity over potential tax reforms, a key factor that has contributed to the ongoing bull rally since the elections. Trump is expected to make an announcement latter today in Springfield, Missouri.
“The tax reform has been one of the biggest reasons for the rally and I think it is going to go through,” Ben Barzideh, wealth adviser at Piershale Financial Group, told Reuters. “I know there is a wide disagreement on the healthcare issue. But it feels like on tax reforms, the vast majority of Republicans see eye to eye on it. I definitely expect that to happen.”
Looking ahead, investors will be watching out for Thursday’s personal-consumption expenditures inflation data as well as Friday’s monthly jobs report, especially with the Federal Reserve divided over the timing on when to raise rates amid tepid economic growth.
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