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.
Materials and real estate stocks led S&P 500 advancers. Only the industrials and consumer discretionary stock sectors closed lower, by less than 0.1 percent each.
Financial stocks rose, with the SPDR S&P Bank ETF (KBE) posting its first 10-day win streak on record.
"The market is still fueled by liquidity and fundamentals," said Jack Ablin, chief investment officer at BMO Private Bank. "Essentially if you look at every major economy in the world, [they're] all expanding simultaneously."
Major technology-related stocks steadied Thursday after large declines earlier in the week. Apple and Netflix closed less than 1 percent lower, while Facebook and Amazon.com each closed about 0.6 percent higher.
The GOP tax plan released Wednesday breaks rates down into three categories and cuts corporate tax rates. The plan also seeks to give companies a break for profits stashed overseas while doubling the standard deduction for most filers. Stocks closed higher Wednesday after struggling intraday, with the Dow and S&P tracking for their eighth-straight quarterly gain.
"There's still only broad strokes," said Robert Pavlik, chief market strategist at Boston Private Wealth. "People want to embrace some kind of news out of [Washington], D.C., but this doesn't go far enough. So that's what led us to today['s market performance]."
Treasury yields came off session highs, with the 2-year yield near 1.45 percent after hitting 1.499 percent, its highest since Nov. 4, 2008.
The 10-year yield traded near 2.31 percent after reaching 2.359 percent, its highest since July 13. The 30-year Treasury yield briefly hit its highest since Aug. 1.
The German 10-year bund yield briefly rose to near 0.49 percent. European stocks closed slightly higher. The euro traded near $1.1782 with the U.S. dollar index near 93.2 after earlier hitting its highest since Aug. 18.
"I do think there's going to be a point when the [stock] market is going to look at rising yields," said John Caruso, senior market strategist at RJO Futures. "There's speculation out there the Fed is behind the curve as well."
"At this point I don't think the stock market wants to see a strong dollar, higher yields," Caruso said.
In economic news, the final read on U.S. second-quarter gross domestic product showed a 3.1 percent increase. Weekly jobless claims rose slightly to 272,000.
Gold futures for December delivery settled up 90 cents at $1,288.70.
U.S. crude oil futures settled 1.1 percent lower at $51.56, falling from a five-month high.
— CNBC's Jeff Cox and Chris Hayes contributed to this report.