The Dow Jones industrial average closed about 40 points higher Thursday and the small-cap Russell 2000 index hit an all-time high after the release of the GOP's highly anticipated tax reform plan.
The small-cap Russell 2000 index erased opening losses to hit an all-time high of 1,489.35 and closed at a record 1,488.79 . Many market strategists expect the smaller market capitalization stocks to benefit more than large-cap stocks from tax reform.
"I think there's some of the tax cut hope built into this rally but I think it's more a function of rising interest rates and a stronger dollar," said Marc Chaikin, CEO of Chaikin Analytics. "You've got a signal from the Russell 2000, which has been so strong, that's bullish for the S&P going into year end."
The S&P 500 gained 3 points to a record close of 2,510.06 , coming within 0.1 percent of its all-time high but failing to hit an intraday record. The Nasdaq composite closed 0.2 points higher, within 0.4 percent of its record. The Dow transports also edged up to an all-time high.
"The market's just trying to gauge the overall sentiment in the market [on tax reform], how much of that is priced in and what the timing is going to be," said Dan Deming, managing director at KKM Financial.
McDonald's rose more than 2 percent as the biggest contributor to gains in the Dow after Longbow Research raised its rating for the restaurant chain to buy from neutral on expectations McDonald's sales will top Wall Street estimates.