Longtime market bull Jeremy Siegel says the two-month market rally has been fueled by investors buying on the hope of tax reform and that is nearing its end.
"I'm very positive on the tax plan but it's buy on the anticipation, sell on the news," he said Tuesday on CNBC's "Closing Bell." "All the good things about the corporate tax plan have been built into the rally we have seen for the last two months and I'm not sure how much else there is really going to be."
The Wharton School finance professor said earlier this year that the U.S. stock market had another 10 percent to run because of tax reform. That overhaul is indeed getting closer to reality, with both chambers of Congress hoping to finalize their votes and get the bill to President Donald Trump's desk this week.
The Dow Jones industrial average is currently approaching the 25,000 mark and trades at a multiple of 20. Siegel said a 20 price-earnings ratio is "the new normal," but he said political challenges for Republicans are going to weigh on markets.
Last month, Siegel told CNBC that the market was nearing a top and that returns next year could be lower than 10 percent. Vanguard Group, the giant asset manager, has also predicted medium-term returns of 4 to 6 percent.