U.S. stocks rose on Thursday as more companies released quarterly results while Treasury Secretary Steven Mnuchin said the administration was close to "major tax reform."
Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan "very soon." However, the Trump administration previously set deadlines for releasing its tax plan that it did not meet.
"If there is some sort of breakthrough, it will be positive" for stocks, said Edward Campbell, managing director for QMA, a multi-asset manager wholly owned by Prudential Financial. He added, however, investors may need to moderate their expectations regarding tax reform.
The Dow Jones industrial average rose more than 150 points, with Goldman Sachs and American Express contributing the most gains. The credit-card giant reported better-than-expected first-quarter earnings, lifted in part by higher spending numbers from card members.
"Corporate America is hanging in there despite softening economic data," said Lindsey Bell, investment strategist at CFRA. "I know Verizon was a disaster but you got some pretty good results out of American Express and CSX."
Verizon, another Dow member, missed the mark on both earnings and revenue. The company attributed a 5.1 percent drop in sales to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity.
Dow intraday chart
Railway company CSX posted better-than-expected results and said it expects profit to jump 25 percent this year. The stock rose more than 5 percent to lead the Dow transports, which popped more than 1.5 percent.
As of Thursday afternoon, 79 percent of the 82 S&P 500 components that had reported quarterly results topped earnings-per-share estimates, while 70 percent have topped sales expectations, according to FactSet data.
The S&P 500 gained 0.7 percent, with financials, industrials and materials rising more than 1 percent to lead advancers. The index also closed right around its 50-day moving average, a key technical level.
The SPDR S&P Regional Banking ETF (KRE) and the Bank ETF (KBE) rose more than 1.5 percent. Steel stocks also caught a bid after President Donald Trump said he directed the Commerce Department to prioritize a probe on foreign steel products' effect on U.S. national security. Shares of U.S. Steel surged more than 8 percent.
The Nasdaq composite outperformed, rising 0.9 percent, and posted a record close.
"There are just a bunch of little things adding to this rally today," said Jeremy Klein, chief market strategist at FBN Securities.
Equities posted a mixed session on Wednesday as IBM shares dragged the Dow lower while energy stocks pinned down the S&P 500.
"From a broader perspective, we're bouncing back and forth as the soft data has not yet filtered into the hard data," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. "Today, we're seeing a bit of that," he said referring to the mostly strong quarterly reports.
U.S. crude prices slipped 17 cents to settle at $50.27 per barrel on Thursday. WTI fell nearly 4 percent on Wednesday after the Energy Information Administration released bearish supply data for the market.
"This is a dicey one because the market is being hit by a confluence of events," said Quincy Krosby, market strategist at Prudential Financial. "What the market needs right now is a clutch of unequivocally strong hard data" to regain its footing.
Investors also looked ahead to the first round of the French presidential election, which is scheduled for Sunday. Uncertainty around the election has grown over the past month after far-left candidate Jean-Luc Melenchon's surprising surge in the polls.
According to French pollster Ifop, Melenchon was just five percentage points behind the front-runner, centrist Emmanuel Macron as of Wednesday.
In economic news, initial jobless claims rose to 244,000, topping expectations, while the Philadelphia Fed business index fell to 22 in April from 32.8 in March. Leading indicators rose more than expected in March.
The Dow Jones industrial average rose 174.22 points, or 0.85 percent, to close at 20,578.71, with American Express leading advancers and Travelers lagging.
The gained 17.67 points, or 0.76 percent, to end at 2,355.84, with financials seven sectors higher and utilities lagging.
The Nasdaq advanced 53.74 points, or 0.92 percent, to close at 5,916.78.
About three stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 866.09 million and a composite volume of 3.638 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.1.
—CNBC's Lauren Thomas and Jacob Pramuk contributed to this report.
On tap this week:
9:45 a.m. Manufacturing PMI
10:00 a.m. Existing home sales
Watch: Market still on its heels