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5h ago

Trump’s Tax Bill Clears House Debate Stage, Fueling Market Turmoil

The proposed legislation, projected to add trillions to the U.S. debt, has heightened fiscal concerns, driving bond yields to multi-year highs and sparking a sell-off in stocks.

Tariff and fiscal fears are dragging the stock market and pushing bond yields higher.
NEW YORK, NEW YORK - MAY 21: Traders work on the floor of the New York Stock Exchange (NYSE) on May 21, 2025 in New York City. The Dow dropped over 800 points as continued worries about tariffs and the state of the U.S. economy persist. (Photo by Spencer Platt/Getty Images)

Overview

  • The House of Representatives voted along party lines to advance President Trump's tax and spending bill to a full vote, marking a significant procedural step forward.
  • The bill, estimated to increase U.S. debt by $3 trillion to $5 trillion over the next decade, has drawn criticism from analysts and Republican hardliners for its fiscal implications.
  • Moody's recent downgrade of U.S. credit to Aa1 has intensified concerns over the nation's $36 trillion debt, contributing to a sharp rise in Treasury yields and market volatility.
  • A weak 20-year Treasury auction pushed yields to their highest levels since November 2023, reflecting reduced investor confidence in U.S. debt as a safe haven.
  • Major U.S. stock indexes fell over 1% in response to rising borrowing costs and fiscal uncertainty, while the dollar weakened against major currencies.