NEW YORK (Reuters) - U.S. stocks rose on Wednesday as gains in financial shares were powered by growing expectations for a December interest rate hike and on hopes President Donald Trump’s administration may be making progress on a tax plan.

New orders for U.S.-made capital goods increased more than expected in August and shipments maintained their upward trend, pointing to underlying strength in the economy.

The data, coupled with comments from Fed Chair Janet Yellen on Tuesday boosted anticipation the Federal Reserve would raise U.S. interest rates in December, lifting yields on U.S. Treasuries, which in turn pushed financials .SPSY up 1.3 percent.

“With rates going up, that is why banks move. If rates go up and are sustainable they can start to make some money,” said Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta, Georgia.

Trump proposed the biggest tax overhaul in three decades but offered scant details about how to pay for the cuts without dramatically driving up federal deficits.

If passed, the plan would be Trump’s first significant legislative win since taking office in January.

“For the first time since we have had Trump and the administration in office, it looks like there is incrementally more of a possibility of tax reform going through that would actually be meaningful,” said Martin.

The Russell 2000 index of small-cap stocks .RUT rose 1.92 percent and notched its best day since early March. Small-cap names are likely to be the biggest beneficiaries of a tax cut.

Traders now see about a 78 percent chance of a December rate hike, compared with roughly 73 percent a week ago, according to CME Group’s FedWatch tool.

Bank of America BAC.N rose 2.42 percent and Goldman Sachs GS.N gained 2.1 percent as the biggest boost to the Dow.

The Dow Jones Industrial Average .DJI rose 56.39 points, or 0.25 percent, to 22,340.71, the S&P 500 .SPX gained 10.2 points, or 0.41 percent, to 2,507.04 and the Nasdaq Composite .IXIC added 73.10 points, or 1.15 percent, to 6,453.26.

Interest-rate-sensitive and dividend-paying sectors declined. The consumer staples index .SPLRCS fell 0.73 percent while utilities .SPLRCU dropped 1.34 percent and real estate .SPLRCR lost 0.84 percent.

Also serving to cap gains on the Dow and S&P were Nike NKE.N shares, which declined 1.92 percent after the company posted its slowest quarterly sales growth in nearly seven years and said it expected a further drop in revenue from North America.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 2.71-to-1 ratio favored advancers.

About 6.55 billion shares changed hands in U.S. exchanges, compared with the 5.91 billion daily average over the last 20 sessions.