Stocks Trade Near Record Territory After ‘Biggest Tax Cut’ In US History
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Markets opened strong Thursday morning, coming off the heels of President Donald Trump’s tax reform proposal Wednesday afternoon.
The NASDAQ composite index was trading in historic territory, sitting at 6,044 Thursday morning. The index broke the 6,000 milestone for the first time ever in its 46-year history Tuesday morning. The Dow and the S&P 500 were also tracking in the green. (RELATED: NASDAQ Tops 6K For First Time In History)
The market closed at a net-loss Wednesday after Treasury Secretary Steve Mnuchin and National Economic Economic Council Director Gary Cohn debuted the proposal.
The bill, which marks the first attempt to overhaul the U.S. tax code since former President Ronald Reagan in 1986, includes features the president floated on the campaign trail. It contains an increase in the standard deduction rate for individuals and a massive cut to the U.S. corporate tax rate. (RELATED: Which Candidate Is Better For Your Bottom-Line: Trump Or Clinton?)
Financial experts warned hours before the release that if Trump’s proposal failed to address the corporate tax rate the market would be in for a major correction.
“Investors have put a lot of stock behind today’s announcement, and if Trump fails to provide the specifics of his plan or explain how he intends to pay for it, then a pullback below 20,850 points for the Dow Jones and 2,375 points on the S&P 500 wouldn’t surprise us,” Head of Research at ADS Securities Konstantinos Anthis told reporters.
Market strategists believe the market’s reaction wasn’t as volatile as originally anticipated, because the plan largely reflected the proposal Trump put forth on the campaign trail. As a result, a great deal of plan was already incorporated into the market’s current evaluation, MarketWatch reports.
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