Markets have delivered a robust performance in 2017 with the major benchmarks scaling new highs. The S&P 500 is currently at its highest level at 2,687.54 points, reflecting a 20.2% year-to-date gain. At 24,837.51 points, the Dow has also witnessed a 25.3% year-to-date increase. Although we have witnessed a series of natural disasters this year that have affected Florida, Houston, Northern California, Puerto Rico and the U.S. Virgin Islands, these could not bring the market down.

What’s Behind the 2017 Market Boom?

Strong earnings and steady economic growth have helped the market to flourish in 2017. It boosted investor sentiment. In the third quarter of 2017, overall earnings for S&P 500 companies were up 6.9% year over year. Also, per the Department of Commerce, U.S. Real GDP increased 3.2% in the third quarter, the highest since the first quarter of 2015.

Another economic index, unemployment is at a 17-year low of 4.1%, while 228,000 new jobs were added in November alone. The majority of the increase came from construction firms and manufacturers. Hiring in the space increased during the recovery from storm-related disruptions. Annual hourly pay also climbed up 2.5%, strengthening the labor market. The effect of these improvements is expected to continue in 2018 as well.

Finally, the Trump effect was a significant trigger for the market. Several industries witnessed a strong boost due to his corporate-friendly policies. Exports have increased rapidly in the last few quarters. U.S. companies have benefited from his plans and we expect them to do so in the coming quarters. Notably, total earnings for the fourth quarter of 2017 are expected to increase 8.6% year over year, backed by 6.8% higher revenues. The energy sector, with a whopping 168.4% year-over-year projected earnings growth, is expected to lead the market in the quarter. Arguably, the best of the lot (policies) is the tax-cut, which brought the corporate tax rate down to 21% from 35%.