US close: Stocks rise amid tax reform optimism

US stocks ended in the black on Tuesday amid reports of progress on tax reform on Capitol Hill.

The Dow Jones Industrial Average rose 0.9% to 21,899.89, the S&P 500 gained 1% to 2,452.51 and the Nasdaq closed up 1.4% at 6,297.48.

The upbeat mood was attributed in part to a Politico report suggesting progress on tax reform. According to the report, which cited five sources familiar with the talks between top members of the Trump administration and several key Republican Congressmen, a broad consensus has been reached on the best way to go about cutting both the individual and corporate tax rates.

"One day down, one day up, and so on. This is the theme of August, with markets unable so far to establish a direction and stick with it. After losses yesterday the buyers have come back in, with fresh hope of moves on US tax reform apparently providing the catalyst for gains. Warm words from Senate leader McConnell on the debt ceiling are also helping to boost confidence," said IG's chief market analyst Chris Beauchamp.

In corporate news, shares of Tenet Healthcare ended down 5.9% following the exit of two members of its board who represented its main institutional shareholder, Glenview Capital Management.

Medtronic closed off 2.1% after the medical equipment manufacturer posted worse than expected second quarter sales of $7.39bn, while beauty products maker Coty slumped 9.4% after it reported a surprise quarterly loss.

Going the other way, discount shoe retailer DSW Inc. surged more than 17% after reporting its first gain in same store sales since 2015.

Freeport-McMoran was up 2.3% on news that Indonesia expects to strike an agreement this month to allow the company to keep operating its copper mine in Papua, while Macy's advanced 4.6% as it announced job cuts and a restructuring.