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Wall Street Rose amid Trump’s Tax Cut Proposal on September 27

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Dec. 4 2020, Updated 10:53 a.m. ET

S&P 500

This week, the S&P 500 started on a weaker note due to the market’s lower risk appetite amid geopolitical concerns. After closing Tuesday flat, the S&P 500 moved higher on September 27. On Wednesday, six out of the 11 major sectors closed the day with gains. Strength in the financials and IT sectors pushed the market higher. On the other hand, weakness in the real estate and utilities sectors limited the gains.

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Market sentiment

Last week, the market sentiment improved amid increased expectations of one more interest rate hike by the end of 2017. However, the market sentiment weakened at the beginning of this week amid an exchange of words between North Korea and the US. The sentiment in Wall Street improved on Tuesday after Fed Chair Janet Yellen’s hawkish comments about interest rate hikes and inflation. On Wednesday, the market started the day on a mixed note but rose after President Trump’s tax reform plan proposal. The plan calls for a reduction of the top income tax rate for high-earning individuals, decreased corporate tax rates, and tax for small businesses. Despite a lot of criticism, the market reacted positively and rose close to record high price levels.

Volatility

On September 27, the S&P 500 opened the day higher and made fresh record intraday highs. The CBOE Volatility Index (or VIX) measures uncertainty in the market. On September 27, it fell 3% to 9.87. The VIX is measured on a scale of one to 100 with 20 as the historical average. The VIX is also called the “fear index.” It usually has an inverse relationship with stocks and rises when the S&P 500 falls.

NASDAQ and Dow

The NASDAQ Composite Index and Dow started higher on September 27. Due to strength in the IT sector, the tech-heavy NASDAQ Composite Index closed the day at 6,453.26 with a gain of 1.2%. The Dow Jones Industrial Average rose 0.25% and closed at 22,340.71.

In the next part of this series, we’ll discuss the S&P 500’s top gainers on September 27.

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