- The US Senate passed its Tax Cuts and Jobs Act, which lowers the corporate tax rate to 20%, early Saturday morning.
- The bill must still be passed by the House of Representatives.
- Bank stocks were trading higher on Monday.
- Watch the major US stock markets move in real time here.
Senate Republicans gathered enough votes on Saturday morning to pass their major tax overhaul bill, dubbed the Tax Cuts and Jobs Act, and bank stocks are rising on the news.
The TCJA reduces the corporate tax rate from 35% to 20%, and that has sent many of the Wall Street banks higher on Monday. A lower corporate tax rate could lead to better earnings, which have been a big driver of growth recently. UBS estimated that 20% tax rate could boost earnings per share by 6.5% to 9.5% on average.
JPMorgan previously said that tax reform could be a “significant near-term upside catalyst for equities.” US stock markets are set to open at all-time highs on Monday after the bill’s passing.
The tax bill is set to head to a conference committee where members of the House and Senate will unify their separate bills. The House could also vote to pass the Senate’s version of the bill. GOP members are hoping to send the finalised bill to President Trump to sign by December 25.
Here are how many of the largest Wall Street banks are moving on Monday.
- Bank of America (BAC) +2.28% at $US28.74
- JPMorgan (JPM) +2.05% at $US106.94
- Citigroup (C) +1.97% at $US77.00
- Key Corp (KEY)+1.58% at $US19.43
- Wells Fargo (WFC) +1.81% at $US57.22
- Capital One (COF) +0.86% at $US93.51
- BB&T (BBT)+2.48% at $US50.83
- Goldman Sachs (GS) +1.90% at $US253.67
- PNC (PNC) +0.86% at $US142.21
- SunTrust (STI)+62.88% at $US62.88