U.S. Stocks Surge Following Positive Comments on Tax Reform

U.S. equity markets surged on Thursday in reaction to a number of robust quarterly results and positive comments from Treasury Secretary Steven Mnuchin regarding the Trump Administration’s plan for tax reform.

Stocks spiked to the upside after Mnuchin said the White House will unveil a tax reform plan “very soon.” The Dow Jones Industrial Average soared more than 200 points after this comment.

In terms of timing, Mnuchin said he hoped passing a tax overhaul will not “take till the end of the year.” Earlier in the week, he said getting a bill to President Trump’s desk before August is “highly aggressive to not realistic at this point.”  In February he said that he wanted to see “very significant” tax reform passed by Congress’ August recess.

Despite the changing comments, investors felt today’s statement was strong enough for a market that had been starving for bullish news.

Earlier in the session, the Dow was supported by strong gains in American Express after the credit card company reported better-than-expected first quarter earnings. Traders shrugged off a drop in Verizon, which missed the mark on both earnings and revenue.

Railway giant CSX also posted better-than-expected results and said it expects profits to jump 25 percent this year. This news helped the Dow Transportation Average gain more than 1.5 percent.

The benchmark S&P 500 Index posted a 0.9 percent gain, led by financials, industrials and materials.

President Donald Trump helped drive shares of U.S. Steel up more than 7 percent when he directed the Commerce Department to prioritize a probe on foreign steel products’ effect on U.S. national security.

Economic News

U.S. Weekly Initial Jobless Claims rose to 244,000, higher than the expected 241,000 and last week’s 234,000.  The Philadelphia Fed Index fell to 22 in April from 32.8 in March. According to the Conference Board, Leading indicators rose more than expected in March, coming in up 0.4%, higher than the 0.2% estimate. Last month’s figure was revised down to 0.5%.

Crude Oil

Crude oil prices were steady on Thursday with production concerns capping the market and talk of an extension of the program to trim production providing support.

According to reports, OPEC members Saudi Arabia and Kuwait are signaling for an extension beyond June along with non-member Russia. At a press conference in the United Arab Emirates, Saudi Energy Minister Khalid al-Falih said that “there is consensus building but it’s not done yet.”