The main U.S. stock indexes hit record intraday highs on Monday, with the S&P 500’s market capitalization topping $20 trillion for the first time ever, as the “Trump trade” was jump-started on renewed optimism about the economy.
President Donald Trump vowed last Thursday to make a major tax announcement in the next few weeks, rekindling a rally that has stalled amid concerns over his protectionist stance and lack of clarity on policy reforms.
Financials .SPSY jumped 1.2 percent, with banks leading the way. The S&P 500 banks .SPXBK index leaped 1.5 percent. The industrial sector .SPLRCI gained 0.84 percent. Financials and industrials are seen benefiting the most, among the 11 major S&P sectors, from Trump’s policies.
The S&P has surged 8.3 percent since Trump’s Nov. 8 election through Friday’s close, fueled by expectations Trump would lower corporate taxes, reduce regulations and increase infrastructure spending.
“At some point there has to be actions that match the words and I think we are getting closer to that point,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
Fundamentals also remain robust, with strong economic data in recent weeks supported by upbeat corporate results. S&P 500 companies are on track for their strongest profit growth in nine quarters, according to Thomson Reuters I/B/E/S.
“What is underlying this whole Trump rhetoric is that fundamentals in the world, including the U.S., are getting better,” Schutte said. More