Wall Street records modest gains on US data and tax reform hopes

After starting the day slightly higher, major equity indexes in the U.S. extended their gains as the inflation data dampened the expectations for another rate hike in 2017 and Treasury Secretary Steven Mnuchin's remarks revived the hopes of a tax reform. 

According to the data released by the Bureau of Economic Analysis said on Thursday, the core PCE price index, the Fed's preferred gauge of inflation, remained unchanged at 0.1% on a monthly basis in July but dropped to its lowest level in 20 months at 1.4% on a yearly basis, denting the odds of a December rate hike. The S&P financials index .SPSY reached its daily high at 410 points before closing the day flat at 408. In the meantime, a recent Reuters survey revealed that the OPEC's pledge to output cut increased to 89% in August from 84% in July, providing a boost to crude oil prices and allowing the S&P energy index .SPCRT to gain 0.5%. 

• Forex today: dollar wobbles in month end flows and damp PCE

On the other hand, following US President Trump's tax-reform speech yesterday, Treasury Secretary Mnuchin said that the House and the Senate were now circulating the tax reform among its members and they were hoping to get a tax plan by the end of 2017 with the aim of lowering the corporate tax rate down to 15%.

Commenting on Mnuchin's statements, “even if investors aren’t taking him at his word they expect him to do all he can. This is a market that has heard tax reform so often. It wants to see if they can deliver,” Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey, told Reuters.

The Dow Jones Industrial Average gained 55.67 points, or 0.25%, to 21,948.10, the S&P 500 added 14.00 points, or 0.57%, to 2,469.75 and the Nasdaq Composite rose 57.33 points, or 0.9%, to 6,425.64.

Headlines from the U.S. session:

• Key events for the close? - Westpac
• OPEC oil output falls by 170,000 bpd in August - Reuters
• US Pending Home Sales fail to repeat a strong June - Wells Fargo
• US: Income and spending up in July, inflation remains tame - Wells Fargo
• Fed's Kaplan: Want to focus on recovery, safety after Harvey, rather than economic impact
• US Treasury Sec. Mnuchin: House on track to get tax plan by end-2017 - CNBC
• US tax reform and the Fed - BBH
• WTI surges above $47.00, fresh 3-day tops
• US: Personal income increased $65.6 billion (0.4%) in July
• US: Weekly initial claims was 236,000, an increase of 1,000 from previous week
• US-based employers announced plans to cut payrolls by 33,825 in August
• US: Pending home sales lessen 0.8% in July
• US: August Chicago Business Barometer stayed unchanged at 58.9