(Bloomberg) -- U.S. stocks shot to new highs after Republican leaders said they’ll release the final version of the tax overhaul bill Friday evening. The dollar gained as investors assessed messages from the Federal Reserve and European Central Bank meetings this week.
All major equity gauges spiked higher earlier in the session, after fence-sitting Senator Marco Rubio said he’d support the plan. The S&P 500 Index, Dow Jones Industrial Average, Nasdaq 100 Stock Index and Nasdaq Composite Index all set fresh records. The small-cap Russell 2000 Index, whose domestically focused members stand to benefit most from tax cuts, added more than 1.5 percent. Equities slumped Thursday when Rubio indicated he wouldn’t support the bill in its current form.
Uncertainty surrounding the fate of U.S. tax reform has had investors on edge as they look to the end of a stellar year for equities. Money managers have shown signs of dialing back their appetite to take risk amid signals that the eight-year stock rally may not be far from its end.
“We’ve got investors heading into year-end trying to figure out where they need to make adjustments in their portfolios with the new tax codes coming into effect and also in general we’re seeing global markets continuing their recovery,” said Chris Gaffney, president of EverBank World Markets in St. Louis.
Aside from the back-and-forth on tax negotiations, a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual shares expire, also added to volatility in the stock market.
Treasuries were lower. Gold climbed with crude, which continued to trade above $57 a barrel. The Stoxx Europe 600 Index was lower with retailers leading the decline as Hennes & Mauritz AB (ST:HMb) plunged after reporting a slump in quarterly sales. South Africa’s rand gained even as volatility soared before the ruling African National Congress meets this weekend to elect a new leader.
The euro turned lower as the ECB remained cautious about the prospects of reaching its inflation goals while reiterating a pledge to keep stimulus in place. The pound dropped and yields on U.K. gilts fell to the lowest since September amid speculation Brexit talks are about to get more difficult. Russia’s ruble fluctuated after the nation’s central bank cut rates more than expected.
Terminal customers can read more in our Markets Live blog.
This is the key event investors are watching:
- South Africa’s ruling African National Congress meets this weekend to elect a leader to replace Jacob Zuma as party president. The outcome may be known by Sunday.
And these are the main moves in markets:
Stocks
- The S&P 500 was up 1 percent to 2,678.15 as of 2:32 p.m. in New York.
- The Dow gained 0.6 percent, while the Nasdaq 100 and Nasdaq Composite surged 1.2 percent.
- The Stoxx Europe 600 Index tumbled 0.2 percent.
- The U.K.’s FTSE 100 Index rose 0.6 percent.
- Germany’s DAX Index added 0.3 percent.
- The MSCI Asia Pacific Index declined 0.6 percent.
Currencies
- The Bloomberg Dollar Spot Index increased 0.4 percent.
- The euro slid 0.2 percent to $1.1756.
- The British pound fell 0.8 percent to $1.3319.
- South Africa’s rand climbed 2.5 percent to 13.1764 per dollar, the strongest in three months.
Bonds
- The yield on 10-year Treasuries increased one basis point to 2.3619 percent.
- Germany’s 10-year yield declined two basis points to 0.301 percent.
- Britain’s 10-year yield fell two basis points to 1.15 percent, the lowest in three months.
Commodities
- West Texas Intermediate crude increased 0.5 percent to $57.30 a barrel.
- Gold rose 0.2 percent to $1,254.30 an ounce.
- Copper gained 2 percent to $3.11 a pound.
