U.S. equities closed at all-time highs on Wednesday after a series of executive orders from President Donald Trump increased bullish sentiment on Wall Street, while financials outperformed.
"People are seeing that the administration is carrying through with some of the things they promised," said John Stadtler, head of U.S. Financial Services Industry Practice at PwC. "It looks like long-term capital gains are here to stay."
Dow since US election
The S&P 500 advanced 0.8 percent to a new all-time high, with financials rising more than 1.5 percent.
"Clearly, this has become a buy-high-sell-higher market with the Dow breaking above 20,000," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Out of the gate, President Trump is moving along with his agenda."
"More importantly, earnings have been on the cusp of increasing, and that's going to be key to hold these valuations," Sandven said.
The Nasdaq composite gained 0.99 percent, also notching a record high.
"Traders have been waiting for more details on infrastructure spending and now they have it in a very clear format," said Naeem Aslam, chief market analyst at Think Markets. "There is nothing bigger than this. A break of 20,000 for the Dow stimulates fresh capital which has been waiting for this moment to join this party."
On Tuesday, President Trump signed executive orders that will make it easier for TransCanada to build the Keystone XL pipeline and for Energy Transfer Partners to build the final uncompleted portion of the Dakota Access pipeline. The orders helped lift the materials sector to a 2.5 percent gain Tuesday.
"There's no question that some of the executive orders he's signed are good, especially deregulations," said Peter Cardillo, chief market economist at First Standard Financial. "Anything else should be seen as a question mark. We don't know what a wall on the Mexican border would mean for Nafta."
Trump also rolled out executive orders on immigration on Wednesday, including one on border security and the intent to build a wall along the U.S. southern border, and another strengthening the enforcement of immigration laws.
U.S. stocks had rallied significantly following the presidential election, with the S&P 500 advancing 6.57 percent since Nov. 8, entering Wednesday trading. The rally was largely propelled by the prospects of lower corporate taxes, deregulation of certain sectors and more government spending.
However, investors should look out for a potential pullback from these levels, said Jeremy Klein, chief market strategist at FBN Securities. "If funds continue to shovel capital into equities in advance of an inevitable reprise of an undesirable bout of skittishness, then shares may suffer a selloff greater in magnitude and duration than I anticipate," he said.
Investors also paid attention to a series of corporate quarterly results, as Dow components Boeing posted earnings and revenue that beat Wall Street expectations. United Technologies, another Dow component, posted profit and sales that largely met analyst expectations.
In economic news, the FHFA House Price index rose 0.5 percent in November. Mortgage rates, meanwhile, rose 4 percent last week.
Overseas, European equities rose broadly, with the pan-European Stoxx 600 index advancing 1.3 percent. Asian stocks also posted gains overnight, as the Nikkei 225 index popped 1.43 percent.
The Dow Jones industrial average rose 155.80 points, or 0.78 percent, to close at 20,068.51, with Boeing leading advancers and Procter & Gamble lagging.
The gained 18.30 points, or 0.80 percent, to end at 2,298.37, with financials leading eight sectors higher and real estate the top decliner.
The Nasdaq composite advanced 55.38 points, or 0.99 percent, to close at 5,656.34.
About two stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 879.86 million and a composite volume of 3.79 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.8.
U.S. crude prices fell 47 cents to settle at $52.75 per barrel, after bearish supply data from the Energy Information Administration. Gold futures for February delivery dropped $13 to settle at $1,197.80 per ounce.
—Reuters contributed to this report.
On tap this week:
Earnings: eBay, Qualcomm, Citrix, WW Grainger, Las Vegas Sands, Cullen/Frost Bankers, Murphy Oil, McKesson, Norfolk Southern
Earnings: Intel, Microsoft, Alphabet, Caterpillar, Comcast, Dow Chemical, Ford, Fiat Chrysler, Unilever, Biogen, Northrop Grumman, Blackstone, Praxair, Potash, Alaska Air, PulteGroup, LM Ericsson, LVMH, Raytheon, Southwest Air, Stanley Black & Decker
8:30 a.m. Jobless claims
9:45 a.m. Markit services PMI
10:00 a.m. New home sales
8:30 a.m. Durable goods
8:30 a.m. Q4 Real GDP
10:00 a.m. Consumer sentiment