Wall Street slips as US bond market worries intensify after House passes Trump tax bill

NEW YORK: US stocks slipped in early Thursday trading amid growing concerns over rising government debt and surging Treasury yields, following House approval of President Donald Trump’s sweeping tax cut legislation.The S&P 500 fell 0.3 per cent in early trade, putting it on track for its worst week in two months. The Dow Jones Industrial Average declined 101 points, or 0.2 per cent, to 41,829.75 around 9.35 am Eastern time, while the Nasdaq Composite dipped 0.2 per cent to 19,535.10.The pullback comes after a turbulent week driven by volatility in the bond market, the epicentre of investor anxiety. Yields on government debt spiked in response to fiscal concerns, with the 10-year US Treasury climbing as high as 4.63 per cent before edging back to 4.59 per cent. The 30-year bond yield also rose, reaching 5.12 per cent. Rising yields reflect investor unease over the US government’s growing debt load and are seen as a headwind for equity valuations and borrowing costs.Swissquote Bank analyst Ipek Ozkardeskaya said the spike in yields is “the market’s way of signaling a lack of confidence in the US government and its policy direction.”The tax legislation approved by the House aims to extend around $4.5 trillion in tax cuts from Trump's 2017 plan while introducing additional reductions. However, it also scales back clean energy subsidies and includes cuts to certain social programmes. The bill is expected to undergo substantial revisions in the Senate before potentially reaching the president’s desk.Investors are cautious about the long-term economic implications of the tax bill, particularly its projected impact on the national debt. Higher Treasury yields not only increase borrowing costs for the government but also ripple through the broader economy—raising expenses for households and businesses, and dampening appetite for riskier assets like equities.Sector-specific losses were also notable. Solar energy stocks took a hit following the proposed rollback of production tax credits. Sunrun plunged 40 per cent, Enphase Energy dropped 16.5 per cent, and First Solar fell 4 per cent. Health care shares declined after the Centers for Medicare & Medicaid Services announced an immediate expansion of Medicare Advantage audits. UnitedHealth Group fell 1.4 per cent, while Humana slid 3.6 per cent.Global markets mirrored the cautious sentiment. France’s CAC 40 declined 1.1 per cent, Hong Kong’s Hang Seng dropped 1.2 per cent, and South Korea’s Kospi also shed 1.2 per cent in one of the day’s sharper losses.