Wall Street gained as the latest data on US gross domestic product and the labour market bolstered optimism about the outlook for the economy.

In 3.22pm trading in New York, the Dow Jones Industrial Average rose 0.1 per cent, while the Nasdaq Composite Index climbed 1.1 per cent. In 3.07pm trading, the Standard & Poor's 500 Index gained 0.5 per cent.

Wall Street's fear gauge-the CBOE Volatility Index or the VIX-dropped 5.4 per cent to 11.07.

US Treasuries eased, sending yields on the 10-year note two basis points higher to 2.14 per cent

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The Dow moved higher as advances in shares of Cisco and those of Goldman Sachs, recently up 1.7 per cent and 1.6 per cent respectively, outweighed declines in shares of Travelers and those of General Electric, both down 0.8 per cent recently.

A Commerce Department report showed gross domestic product expanded at a 3.0 per cent annual rate in the second quarter, an upward revision from the 2.6 per cent pace reported last month and the fastest pace in two years.

Separately, an ADP report showed that US private employers added 237,000 jobs in August, exceeding economists' expectations.

The latest data supported expectations that the Federal Reserve will announce at its September policy meeting that it will begin to unload some of its balance sheet in October.

"We know what the Federal Reserve will be doing in September," Vincent Reinhart, chief economist and investment strategist at Standish Mellon Asset Management in Boston, told Bloomberg. "The only game is town is what you think the Federal Reserve will do in December."

The Fed has signalled it plans one more interest rate hike this calendar year.

US President Donald Trump spoke on tax reform at an event in Springfield, Missouri.

"This is our once-in-a-generation opportunity to deliver real tax reform for everyday hard-working Americans and I am fully committed to work with Congress to get this job done and I don't want to be disappointed by Congress, do you understand?" Trump said, Reuters reported.

Expectations for tax reform have underpinned Wall Street since Trump's election.

"The tax reform has been one of the biggest reasons for the rally and I think it is going to go through," Ben Barzideh, wealth adviser at Piershale Financial Group, told Reuters. "I know there is a wide disagreement on the healthcare issue. But it feels like on tax reforms, the vast majority of Republicans see eye to eye on it. I definitely expect that to happen."

To be sure, some flagged concern about the outlook for equities and bonds. Citigroup strategists including Jeremy Hale cite "worrying developments" that may signal the approach of a correction in stocks, while Commerzbank finds growing evidence of bearish sentiment in bond funds, Bloomberg reported.

In Europe, equities also advanced. The UK's FTSE 100 Index rose 0.4 per cent, while France's CAC 40 Index and Germany's DAX Index both gained 0.5 per cent.