[UNITED STATES] U.S. equities closed largely unchanged on Thursday after a turbulent trading session, recovering from early losses as Treasury yields pulled back from recent highs. The rebound followed the House of Representatives’ approval of President Donald Trump’s contentious tax and spending package.
Concerns over ballooning federal deficits have driven Treasury yields higher in recent days, pressuring equities. However, a dip in longer-term yields offered markets a reprieve. The yield on the benchmark 10-year U.S. Treasury note fell 5.4 basis points to 4.543%, retreating from levels not seen since February.
The sweeping tax and spending legislation—hailed by the Trump administration as a boost for growth—has drawn sharp criticism for its potential to swell the national debt. The bill includes significant tax cuts and ramps up spending on infrastructure and defense, aligning with core campaign pledges. Yet, its long-term economic implications remain uncertain, leaving investors on edge about potential impacts on corporate earnings and consumer behavior.
The S&P 500 and Dow Jones Industrial Average ended the session virtually flat, while the Nasdaq posted modest gains. The cautious market response underscores broader investor unease. While certain sectors may benefit in the near term, the projected rise in federal debt and the possibility of higher interest rates could push up borrowing costs and weigh on future economic growth.
On Wednesday, Wall Street saw its steepest single-day declines in a month amid surging yields and renewed debt concerns. The House passed the tax bill by a narrow margin, highlighting internal divisions within the Republican Party. The measure, if enacted, is expected to expand the U.S. debt burden by $3.8 trillion over the next decade, according to the Congressional Budget Office.
This internal GOP discord may complicate future legislative efforts and influence the broader trajectory of U.S. economic policy. Meanwhile, investors are also closely monitoring the potential inflationary effects of Trump’s tariffs on imports.
“The tax bill passing was today’s main event,” said George Young, partner and portfolio manager at Villere & Co. in New Orleans. “But we’re focused on broader issues—mainly tariffs and interest rates.” He added, “The market dislikes uncertainty, and we’re still grappling with unresolved questions about tariffs and the bond market, which operates independently of political influence.”
The Dow Jones Industrial Average slipped just 1.35 points to 41,859.09, the S&P 500 shed 2.60 points, or 0.04%, to close at 5,842.01, and the Nasdaq Composite gained 53.09 points, or 0.28%, to reach 18,925.74.
Eight of the 11 primary S&P 500 sectors ended lower, with utilities, healthcare, energy, and consumer staples among the laggards. Conversely, consumer discretionary, communication services, and technology stocks posted gains.
Major tech names helped support the Nasdaq. Nvidia, Amazon, and Tesla all advanced, while Alphabet rose 1.3% after hitting a near three-month high. Apple slipped 0.36%.
Shares of Snowflake soared over 13% after the cloud data firm raised its fiscal 2026 product revenue outlook. Analog Devices fell 4.6%, despite reporting better-than-expected quarterly earnings. Solar stocks, including First Solar, declined amid fears that green-energy subsidies could be rolled back under the new tax plan. First Solar ended the day down 4.3%.
On the NYSE, declining stocks outnumbered advancers by a ratio of 1.17 to 1. The exchange recorded 68 new 52-week highs and 99 new lows. The S&P 500 posted four new highs and nine new lows, while the Nasdaq logged 49 new highs against 109 new lows.
Total trading volume on U.S. exchanges reached 16.09 billion shares, below the 20-day average of 17.56 billion.
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