US close: Stocks end higher as investors bet on Trump

US equity markets ended in the black on Monday, with indices hitting record highs as investor sentiment continued to be buoyed by Donald Trump’s tax-cut promises.

The Dow Jones Industrial Average ended up 0.7% to 20,412.16, the S&P 500 rose 0.5% to 2,328.25 and the Nasdaq added 0.5% to 5,736.96.

Meanwhile, oil prices settled lower, with West Texas Intermediate down 1.8% to $52.90 a barrel and Brent crude down 2% to $55.58 as an OPEC report showing high compliance with last year’s production cut deal was overshadowed by rising US crude output.

Baker Hughes said in its weekly report that over the last month, US oil drillers have added the most drilling rigs since 2012, with a total of 591 rigs.

Sentiment continued to be underpinned by Trump’s pledge last week of a “phenomenal” tax announcement, as investors bet his tax reform plans and softer regulatory environment will boost economic growth and corporate profits.

As a result, financials put in a strong performance, also lifted by news that ex-Goldman Sachs top brass Steve Mnuchin was within hours of being confirmed as Treasury secretary.

"Trump’s agenda of financial deregulation will likely have another supporter in the form Mnuchin. Mnuchin and [director of the White House National Economic Council] Gary Cohn will be a more ‘internationalist’ influence on Trump, potentially putting a lid the President’s penchant for currency wars and trade tariffs," said CMC Markets' Jasper Lawler.

The benefit to Wal"l Street of having an ex-Goldman Sachs banker as Treasury Secretary is pretty self-evident. In extension, it would make sense for Mnuchin to fill key positions at the treasury with his people, namely other Wall Streeters. Senior Goldman Sachs banker Jim Donovan as well as Justin Muzinich, a former Morgan Stanley worker are reportedly being considered for key positions."

Last week, Trumped wrapped up a visit from Japanese Prime Minister Shinzo Abe and on Monday, after his meeting with Canadian Prime Minister Justin Trudeau, the US President went some way towards assuaging investors’ fears when he said he will only be “tweaking” his trade relationship with the country.

In corporate news, Verizon Communications fell after the wireless carrier started selling unlimited data plans again for the first time since 2011.

On the upside, Teva Pharmaceutical Industries rose after quarterly revenue and earnings beat analysts’ expectations but the company swung to a loss.

BHP Billiton gained after the miner declared a force majeure due to a strike at its copper mine in Chile, which sent copper prices to 20-month highs on supply concerns.

Technology giant Apple got a boost after Goldman Sachs upped its price target on the stock citing expectations of strong iPhone sales this year.