S&P, Dow hit record highs as oil prices rally

These rallies added to optimism about Donald Trump's proposed tax reforms

The S&P 500 and the Dow Jones Industrial Average hit record intraday highs on Thursday as a rally in oil prices added to optimism about US President Donald Trump's proposed tax reforms.

Oil prices surged 2 per cent on Thursday after data showed a surprise decline in US inventories, suggesting a global oversupply maybe be ending.

The S&P 500 energy index jumped 0.9 per cent, led by gains in Exxon and Chevron. The sector also provided the biggest boost to the broader index.

US stocks have been on a record-setting rally in the past two weeks after Trump said his administration would make a major tax announcement in the coming weeks.

Treasury Secretary Steven Mnuchin told CNBC on Thursday that he expected a "very significant" tax reform to be enacted by Congress' August recess.

"There is an incremental buy on the market everyday," said Drew Forman, co-head of sales and trading equity at Macro Risk Advisors in New York.

"However, people are getting complacent ... and we're going to need to see some results from the president and the government on some of these policies before we see a huge breakout."

The S&P 500 has not moved more than 1 per cent in either direction since December 7.

At 9:33 am ET, the Dow Jones Industrial Average was up 38.11 points, or 0.18 per cent, at 20,813.71. The index has hit record highs in nine of the past 10 sessions.

The S&P 500 was up 4.94 points, or 0.21 per cent, at 2,367.76 and the Nasdaq Composite was up 2.30 points, or 0.04 per cent, at 5,862.93.

All of the 11 major S&P 500 sectors were higher, with industrials and technology bringing up the rear.

A Labour Department report showed the number of Americans applying for unemployment benefit rose slightly more than expected last week, but the four-week average of claims fell to its lowest level since 1973, pointing to strengthening labour market conditions.

Shares of HP Inc rose 4.5 per cent to $16.92 after the computer hardware maker reported a rise in quarterly revenue.

Boston Scientific slumped 6.7 per cent after the company recalled its Lotus Valve heart devices, citing reports of problems with the locking mechanism. Shares of rival Edwards Lifesciences rose 7 per cent and were the biggest gainers on the S&P.

Carter's rose 6 percent after the company agreed to buy baby and parenting products maker Skip Hop for $140 million.

L Brands dropped 14 per cent after reporting weakening demand at its Victoria's Secret business.

Nvidia slipped 5.8 per cent and was the biggest drag on the Nasdaq after Instinet downgraded the stock to "reduce" from "buy".

Advancing issues outnumbered decliners on the NYSE by 1,979 to 536. On the Nasdaq, 1,277 issues rose and 819 fell.

The S&P 500 index showed 35 new 52-week highs and one new low, while the Nasdaq recorded 56 new highs and four new lows.