On Monday, most shares on Wall Street rallied sending the overall US Market higher with banking stocks being the biggest gainers during the session at the beginning of the week. The Dow Jones Industrial Average, which traded above 24,000 for the first time last week, most indices and stocks rallied further at the beginning of the week as the US Republican Senate passed the tax reform bill over the weekend leading to a recovery in the stock prices of tech stocks which lost ground over the past couple of trading sessions.
US Tax Reform
Most stocks in the United States remained upbeat during the recent market sessions after the U.S. tax reform was revealed to be still on the go and will be reworked and presented to U.S. President Donald Trump over the next couple of weeks.
The possible tax system overhaul in the United States has sent most US stocks to trade higher over the past couple of months following the election of Donald Trump whose election campaign promises massive tax cuts for companies operating in the United States.
Despite the current outlook, most investors have expressed their doubts over the the tax reform proceedings and how it could still be delayed in the next couple of months given how the plan was delayed indefinitely over the year.
The most recent version of the Senate and House of Representative’s tax cuts would cut corporate taxes to 20% from 35%.
Financial Stocks
News of the tax bill sent most stocks particularly financial shares to trade higher during the start of the week. Banking stocks such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C) were up trading by more than 2% recently while shares of Bank of America (NYSE:BAC) traded by 3.5% higher. Goldman Sachs (NYSE:GS) shares were also up by 0.7%.
Analysts have noted on how the current version of the U.S. tax reform could lead to increased share repurchases and dividends
On the other hand, technology stocks fell during Monday’s session as investors looked to the possible benefits or effects of the corporate tax cuts on their portfolios and the overall earnings of such stocks. Tech shares such as PayPal (NASDAQ:PYPL), NVIDIA (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) declined 5.75%, 5.57% and 3.77% respectively. The tech-heavy S&P 500, which has rallied by more than 34% over the year, has lost around 3% since last week on investor concerns of a turnaround in the long rally of tech stocks.