WALL Street stocks slid on Wednesday as US Treasury yields surged amid investor unease over President Donald Trump’s giant tax cut legislation moving through Congress.
The yield on the 10-year US Treasury note approached 4.6 per cent as Trump seeks to unify Republicans in the House of Representatives to approve a sweeping bill that would slash taxes and roll back federal spending.
The yield on the 10-year note reached its highest level since February after a weak US Treasury bond auction pointed to tepid demand.
The Dow Jones Industrial Average ended down 1.9 per cent at 41,860.44.
The broad-based S&P 500 fell 1.6 per cent to 5,844.61, while the tech-rich Nasdaq Composite Index shed 1.4 per cent to 18,872.64.
“Investors are getting worried about the Trump tax bill that is working its way through Congress that is not going to be trimming the debt but actually adding to it,” said Sam Stovall of CFRA Research.
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“As a result, the bond yields have been moving higher and that is causing investors to be concerned.”
Market moves in recent days have revived talk of the “sell America” trade. The current surge in yields tops the level in April when concerns about Trump’s tariffs sparked a sell-off in US assets, including stocks and the dollar.
Just about every company in the Dow finished negative, while 10 of 11 sectors in the S&P 500 ended in the red.
Google parent Alphabet bucked the tide, gaining 2.9 per cent after announcing plans to include advertisements into its new AI Mode for online search.
The integration of advertising has been a key question surrounding generative artificial intelligence chatbots, which have largely avoided interrupting the user experience with ads.
Target fell 5.2 per cent following another disappointing earnings release. The big-box chain, which is contending with tariffs and fallout from a boycott over its reversal on diversity pledges, reported a 2.8 per cent drop in sales.
UnitedHealth Group sank 5.8 per cent following a report in The Guardian newspaper that the health giant paid “secret bonuses” to nursing homes to reduce hospital transfers, risking residents’ health.
UnitedHealth described the report as containing a false narrative, saying “we stand firmly behind the integrity of our programmes, which consistently receive high satisfaction from our members.” AFP
