Senate Approval of Tax Bill Drove the S&P 500 to Record High
The S&P 500 Index made record high
On Monday, December 4, 2017, the S&P 500 Index (SPX-INDEX) (SPY) made a record high of 2,665.2. However, it lost some points before markets closed and ended the day marginally lower. It fell 0.11% on the day.
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The record high in this index was mainly driven by the news that the Republican-controlled Senate passed the tax reform bill on Saturday, December 2, 2017. The reduction in the corporate tax rate from 35% to 20% could significantly boost US (QQQ) businesses.
However, now the bill needs to be presented to the House of Representatives. Both the House of Representatives and Senate must approve the bill before it goes to President Trump. In the next two to three weeks, market participants will monitor any developments in the passage of the bill.
In our previous series, we discussed how tax reform will likely be helpful for various US (QQQ) sectors. However, some pullback in the technology sector is dragging the overall movement of the S&P 500 Index and the NASDAQ Composite (COMP-INDEX). On Monday, a fall in the technology sector ETF (XLK) and in some technology stocks brought the S&P 500 Index into the negative zone.
In the next part of this series, we’ll analyze why the technology sector is showing some nervousness.