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US stocks opened higher on Tuesday, building on a day-earlier rally, spurred by a raft of strong corporate earnings and an expected tax reform plan.The tech-heavy Nasdaq crossed the 6,000 mark for the first time just after the market opened.
Better-than-expected quarterly profits from Dow components, including Caterpillar and McDonald's, helped the blue-chip index outperform other major Wall Street indexes in active trading.
At 9:34 a.m. ET, the Dow was up 153 points, or 0.74%, the S&P 500 was up 9 points, or 0.42%, and the Nasdaq was up 23 points, or 0.40%.
President Donald Trump promised last week to make "a big tax reform and tax reduction" announcement on Wednesday. The President has directed his aides to move quickly on a plan to cut the corporate income tax rate to 15 percent from 35 percent, a Trump administration official said on Monday.
Investor sentiment took a turn over the weekend after centrist and pro-European Union candidate Emmanuel Macron won the first round of the French presidential election. Polls show Macron is likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7.
Wall Street marked its best day since March 1 on Monday, with the Nasdaq edging close to the 6,000-point milestone, as the outcome of the vote increased risk appetite, while investors prepared for a busy week of corporate earnings.
"The French vote and Trump's plan to slash corporate taxes to 15 percent are two powerful forces that will still likely contribute to a positive trend as earnings prove to be better than expected," Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
Of the 100 S&P 500 companies that have reported results so far, 77 percent have beaten profit expectations, according to Thomson Reuters I/B/E/S. Over the past four quarters, 71 percent of the companies had beaten estimates.
(Reuters reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)