US Markets

Stocks close little changed as Congress passes tax bill

Key Points
  • Republican lawmakers approved sweeping amendments to the U.S. tax code Tuesday.
  • Investors have been eagerly waiting for lawmakers to move forward with the bill, sending the major stock indexes to record highs this year.

U.S. equities closed little changed on Wednesday as Congress approved a bill that would cut corporate taxes.

The Dow Jones industrial average slipped 28.10 points to 24,726.65. The finished 0.1 percent lower at 2,679.25, with utilities and real estate offsetting a 1.4 percent gain in energy. The Nasdaq composite closed flat at 6,960.96 as large-cap tech stocks like Apple, Facebook and Alphabet traded lower.

"There is positive momentum in the economy and the market, but we've had a big run-up recently, so now we're just treading water," said Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management.

Senate Republicans approved sweeping amendments to the U.S. tax code Tuesday, including reducing the corporate tax rate to 21 percent from 35 percent.

Traders gather for the IPO of Singapore-based Sea Limited on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 20, 2017.
Brendan McDermid | Reuters

The House voted to pass the measure again on Wednesday, after a procedural snag forced members of the lower chamber to hold another vote on the bill

Originally, three provisions in the bill did not comply with the Byrd Rule, which governs what types of provisions the Senate may consider under the procedural budget window known as reconciliation.

Randy Frederick, vice president of trading and derivatives at Charles Schwab said the market believed it was "almost a near certainty" that the bill would pass. "The challenge was getting it passed through the Senate, and it did so with three votes to spare."

Stocks opened higher on Wednesday before pulling back. Investors have been eagerly waiting for lawmakers to move forward with the bill, sending the major stock indexes to record highs this year.

A rapid rise in interest rates also took some momentum off the stock market. The 10-year U.S. yield hit 2.5 percent, its highest level since March 20, while the two-year yield rose to its highest level since October 2008.

In corporate news, shares of FedEx rose 3.5 percent after the delivery giant's quarterly results surpassed estimates. Micron shares popped 4 percent as its earnings and revenue also beat expectations.

In economic news, weekly mortgage applications fell 4.9 percent, while existing home sales hit an 11-year high.

—CNBC's Jacob Pramuk contributed to this report