Equities rise on Trump tax hopes, French vote relief
New York — Equity markets continued their advance on Tuesday and a gauge of world stocks notched a record for a second straight session, spurred by speculation about US tax reform and relief at French election results.
Wall Street built on gains in the prior session, with the Nasdaq Composite index breaching the 6,000 mark for the first time.
Recent opinion polls have centrist Emmanuel Macron, who won the first round of the French presidential election, with a comfortable lead over far-right, anti-EU candidate Marine Le Pen in a May 7 run-off vote.
Safe-haven assets such as gold and the Japanese yen retreated, while the yield gap between French and German short-term government bonds, a closely watched measure of political risk in the Eurozone, hit its lowest in almost three months..
Bets on clarity regarding the tax code helped boost US stocks, according to Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"(Treasury Secretary Steven) Mnuchin has to have a better-articulated answer to what the tax code changes are in a meaningful way," she said, adding that markets were still in relief-mode after Sunday’s French election results. "The EU is going to hang together most likely." With concern over French elections on the wane, investors turned their focus to corporate earnings and US President Donald Trump’s promise to announce "a big tax reform and tax reduction" on Wednesday.
The Dow Jones Industrial Average rose 241.14 points, or 1.16%, to 21,005.03, the S&P 500 gained 14.57 points, or 0.61%, to 2,388.72 and the Nasdaq Composite added 37.92 points, or 0.63%, to 6,021.73.
The pan-European FTSEurofirst 300 index rose 0.27% and MSCI’s gauge of stocks across the globe gained 0.62% after touching a high of 456.34.
French shares were up 0.2%, after a 4.1% surge on Monday, their biggest daily gain since August 2012.
The euro added to Monday’s gains against the dollar, up 0.6% to $1.0932.
The Canadian dollar fell 0.8% to C$1.3611 per US dollar after the United States announced new duties averaging 20% on Canadian softwood lumber imports.
The Japanese yen weakened 1.08% versus the greenback at 110.98 per dollar, while Sterling was last trading at $1.2838, up 0.35% on the day.
Gold, also seen as a safe-haven asset, fell. Spot gold dropped 0.6% to $1,267.18 an ounce. US gold futures fell 0.65% to $1,269.20 an ounce.
Oil prices continued to slump as doubts about Opec’s ability to reduce global crude inventories put the price on track for its six fall in seven days.
US crude fell 0.26% to $49.10 per barrel and Brent was last at $51.57, down 0.06% on the day.