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3h ago

Trump’s Tax Bill Narrowly Passes House, Driving Market Volatility

The proposed legislation, projected to add $3.8 trillion to U.S. debt, fuels bond sell-offs, weakens the dollar, and pressures equities as Senate approval remains uncertain.

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 U.S. House of Representatives passed President Trump's tax and spending bill by a single vote, advancing it to the Senate for further debate.
  • The Congressional Budget Office estimates the bill will increase the national debt by $3.8 trillion over the next decade, intensifying fiscal sustainability concerns.
  • Yields on 20- and 30-year Treasury bonds rose to their highest levels since late 2023, reflecting tepid demand in bond markets and investor unease over U.S. debt.
  • Major U.S. stock indexes fell over 1% in the previous session, while the dollar weakened against major currencies, reflecting declining confidence in U.S. assets.
  • Global bond markets continue to experience sell-offs, with steepening yield curves in Europe and Asia, as investors reassess risks tied to fiscal policy and debt trajectories.