Hang Seng leads gain as markets rebound as treasury yields ease, Trump’s tax bill advances

Equities mostly climbed on Friday, bouncing back from the previous day’s sell-off triggered by rising US Treasury yields. The recovery came as yields pulled back slightly and optimism grew following the House passage of President Donald Trump’s expansive tax-cutting budget.Market anxiety had been stirred earlier in the week after Moody’s stripped the US of its top-tier credit rating, citing concerns over soaring deficits. These fears intensified following a weak 20-year Treasury auction on Wednesday, which spooked investors already reeling from Trump’s recent tariff measures, news agency AFP reported.Sentiment steadied Thursday after the Republican-controlled House narrowly approved the “One Big, Beautiful Bill Act,” which extends Trump’s 2017 tax cuts for a decade. The plan, which trims social programs to offset costs, now moves to the Senate. Fiscal conservatives remain wary, as independent analyses predict the bill could widen the deficit by up to $4 trillion over ten years.The White House argues the legislation will stimulate economic growth to 5.2%, claiming the growth would neutralize the bill’s impact on the national debt, which stands at $36 trillion. These projections, however, remain outside mainstream economic consensus.“Perhaps the fiscal worries have gone a bit too far,” said Chris Weston of Pepperstone. “The bill appears to be more neutral than overly stimulative and may not lead to the massive deficit surge predicted for 2026 and 2027.”Treasury yields eased amid stronger-than-expected US data on jobs, housing, and factory output, helping stabilize equities. Wall Street's mixed close gave way to modest gains across Asia, including Tokyo, Hong Kong, Sydney, Mumbai, Bangkok, Manila, and Jakarta, while Shanghai, Singapore, Taipei, and Wellington lagged.Investor sentiment was also buoyed by remarks from Federal Reserve Governor Christopher Waller, who suggested interest rate cuts could follow if Trump’s tariffs are reduced to 10% by July.“If we can get the tariffs down closer to 10 percent and that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year,” Waller told Fox Business.Meanwhile, the dollar fell against the yen after Japanese inflation rose more than expected, driven by surging food prices—particularly rice. The figure could influence the Bank of Japan’s upcoming policy decisions following recent rate hikes.In the crypto sector, Bitcoin continued its upward march, hitting a new record of $111,980.33 amid optimism for upcoming regulation on stable coins, raising hopes for broader regulatory clarity.Key Figures at around 0810 GMT –