The S&P 500 and tech-heavy NASDAQ closed at fresh record highs on Friday, while all three major indices ended the month and quarter on a positive note.
On Friday, the S&P increased 9.3 points, or 0.37%, to 2,519.36, the NASDAQ rose 42.51, or 0.66%, to 6,495.96, while the Dow inched 23.89 points, or 0.11%, higher, to 22,405.09.
For the month, the S&P rose 1.9%, the Dow 2.1% and the NASDAQ 1.05%.
All three major indices rose for the quarter on strengthening economic data, despite an, albeit expected, announcement from the Federal Reserve that it would begin unwinding its massive $4 trillion balance sheet next month and multiple blows to the GOP’s efforts to repeal and replace the Affordable Care Act.
During the third quarter, the S&P rose nearly 4%, its eighth consecutive quarter of gains. The index has been higher 17 out of the past 19 quarters.
But while Trump is focused on the S&P, tweeting about the index’s record high Friday morning, the NASDAQ has been the best performing major index throughout his presidency. Since Trump’s inauguration, the index is up more than 17%, and it has surged more than 25% since Election Day, according to data compiled by FOX Business senior editor Charles Brady.
The NASDAQ ended the quarter 5.8% higher.
The Dow saw its largest single quarter point and percentage gain in nearly a year during the third quarter. The blue-chip index has been higher for eight consecutive quarters, the longest winning streak since 1997. The index’s top performing stocks were Boeing (NYSE:BA), Caterpillar (NYSE:CAT), Chevron (NYSE:CVX), Intel (NASDAQ:INTC) and Visa (NYSE:V). The biggest losers: Nike (NYSE:NKE), General Electric (NYSE:GE) Disney (NYSE:DIS), IBM (NYSE:IBM) and United Technologies (NYSE:UTX).
President Donald Trump tweeted about the S&P 500 on Friday, hours prior to a tax reform speech he gave before the National Association of Manufacturers, where he touted successes in the markets and economy.
“Already we are seeing the results of an economic policy that puts America first,” Trump said during a speech before the National Association of Manufacturers on Friday. “Unemployment is at a 16-year low. Wages are rising. The stock market is soaring to record levels. The S&P hit a record high just this morning…”
The newly released Republican tax plan, which proposes slashing the corporate tax rate by 15 percentage points in an effort to make U.S. businesses more competitive on the global stage, is another area of potential optimism for investors and Wall Street.
While all signs are pointing higher in the stock market, one market analyst said valuations are beginning to look troublesome.
“There’s positive growth in the United States and there have been upbeat earnings, but yet valuations are now at a point where [we] are getting to more of a 2000 level,” Chad Morganlander, co-portfolio manager at Washington Crossing Advisors, told FOX Business. “[We’re not] there yet, but it’s starting to get a little silly,”
Jason Rotman of Lido Isle Advisors agrees, telling FOX Business he expects to see a slowdown, but not a correction.
“At these levels I'd expect to see profit-taking in the stock market as the ‘Trump Rally’ has been historic,” he said.
Morganlander concedes the economy could experience a modest bump from Trump’s pro-growth tax plan, but sees some headwinds in this “low-growth environment,” including low productivity and an aging workforce.
“We would be more cautious, not bearish, but cautious in allocating capital at this point,” he said. “I would be shifting around and be in more conservative sectors … taking a little bit [of profit] and stashing it away … is a no-brainer to me.”