S&P 500 Index opens nearly 1% higher, financial stocks fuel rally

• Wall Street’s main indexes opened sharply higher on Wednesday.
• US Treasury Secretary Mnuchin says Trump wants a capital gain tax cut.
• Financial stocks post strong gains on surging US T-bond yields.

Major equity indexes in the US opened the day decisively higher on Wednesday as the market mood turns upbeat on hopes of US President Donald Trump introducing tax cuts for capital gains. As of writing, the S&P 500 was up 0.9% on the day at 3,363, the Dow Jones Industrial Average was gaining 0.77% at 27,902 and the Nasdaq Composite was rising 1.15% at 11,002.

During an interview with Fox Business earlier in the day, US Treasury Secretary Mnuchin reaffirmed that Trump was in favour of a capital gain tax and added that the President wants to move forward with a fair proposal on coronavirus aid legislation.

Reflecting the risk-positive environment, the CBOE Volatility Index, Wall Street’s fear gauge is down 6.65% on a daily basis. 

Among the 11 major S&P 500 sectors, the Financials Index is up more than 1% boosted by surging US Treasury bond yields. On the other hand, the Industrial Index and the Energy Index are underperforming by rising only 0.25% on the day.

S&P 500 chart (daily)