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Trump rally no longer on 'thin ice' after emotional speech, longtime bull Jeremy Siegel says

The stock market's surge after President Donald Trump's address to Congress suggests that it could see new highs if Trump fully embraces the GOP agenda, Jeremy Siegel said Wednesday.

"I thought this rally was on real thin ice" before the president's speech, Siegel told CNBC's "Fast Money Halftime Report." "I don't think it's on as thin [of] ice now."

The Wharton finance professor said that the speech was "a thousand times" better than he personally expected and that he was surprised by Trump's ability to connect emotionally with his audience.

Siegel said he saw Trump not mentioning trade wars or currency manipulation by foreign countries as a nod to the Republican caucus.

"It was very much more Republican than just Trump," Siegel said. "And I've been saying since the beginning, if he goes Republican agenda, that's 22,000 on the Dow."

The Dow Jones industrial average broke 21,000 on Wednesday for the first time ever, a new high that many have attributed to the moderate, hopeful tone of Trump's speech.

But if certain policies play out as expected, the rally's legs may begin to wobble, Siegel said.

"If the corporate tax [reform] turns out to be revenue neutral, you're not going to see the stock market stay at this level," he contended.

The so-called border adjusted tax, which would tax imports into the United States as a way of financially balancing the effects of the proposed tax cuts, is Siegel's most major concern.

"I hope [Trump] doesn't go towards border adjustments for many reasons," Siegel said. "I think that will be a bad adjustment, and it will also not be the tax cut that investors are looking for."