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Senate Approval of Tax Bill Drove the S&P 500 to Record High

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Part 3
Senate Approval of Tax Bill Drove the S&P 500 to Record High PART 3 OF 3

How Various Sectors Reacted to Senate Approval of Tax Bill

Sectors of the S&P 500 Index

On Monday, December 4, 2017, various sectors of the S&P 500 Index (SPX-INDEX) showed positive movement initially. However, by the time markets closed, some sectors ended on negative notes.

How Various Sectors Reacted to Senate Approval of Tax Bill

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The technology (XLK), healthcare (XLV), telecom (XTL), and energy (XLE) sectors fell 1.6%, 1.2%, 1.0%, and 0.03%, respectively, on Monday. However, the financial sector showed stronger movement on that day. The financial sector ETF (XLF) rose 1.5% on the same day and supported the movement of the S&P 500 Index (SPX-INDEX), which was dragged down by the technology sector.

In the previous part of the series, we discussed how the technology sector is reacting ahead of the tax reform. The Senate’s passing tax reform bill mainly drove the S&P 500 Index’s (SPY) movement to a record high level. On the other hand, there is a huge expectation among market participants that there could be a possible rate hike by the Fed in the December 2017 meeting, which is making investors optimistic about the financial sector.

The consumer staples (XLP) and utilities (XLU) sectors rose 0.94% and 0.57%, respectively, on the day. The improvements in these sectors are indicating that investors are also continuing their position in the defensive sector. The defensive sector generally performs well when there is uncertainty in the market.

You may be interested to read, S&P 500 Index at New Highs: Will Bulls Push It Higher?

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