NEW YORK (AP) – Stocks are seeing a downward trend on Wall Street this Thursday during a Turbulent Week, primarily due to concerns arising from the bond market regarding US government debt.
The S&P 500 has shown minimal changes in morning trading, indicating potential losses as it heads towards what may be the worst week in two months. At 11:31 am Eastern time, the Dow Jones Industrial Average dropped 15 points, staying below 0.1%, while the Nasdaq Composite rose by 0.5%.
Technology stocks were mainly responsible for the broader market’s uplift. Although most S&P 500 stocks faced declines, gains from major tech firms mitigated these losses. Alphabet, Google’s parent company, surged by 2.7%, and Nvidia gained 0.8%.
Treasury yields remained somewhat stable within the bond market. The heart of Wall Street’s dynamics this week experienced several sharp fluctuations during the morning. Yields have been on the rise, driven by concerns over the growing US government debt.
The House of Representatives approved the bill early Thursday. This legislation could reduce taxes and add trillions to the US debt.
In addition to raising borrowing costs for the US government, increasing Treasury yields may also have a ripple effect on the wider economy, making it tougher for households and businesses to secure their loans. Moreover, higher yields tend to deter investors from paying premium prices for stocks and other assets.
Treasury yields peaked at 4.63% in 2010 before the US stock market commenced trading, declining to 4.56% thereafter. It was recorded at 4.58% late Wednesday and had been around 4.01% at the start of the previous month. The two-year yield, which closely follows expectations regarding Federal Reserve actions, fell to 3.99% from 4.02% on Wednesday.
The House spending bill worth hundreds of millions, aiming to extend the tax credit of approximately $4.5 trillion from President Donald Trump’s initial term, is anticipated to undergo revisions when it reaches the Senate for voting.
This legislation also incorporates a swift rollback of production tax credits for clean power initiatives, causing a sharp decline in solar company stocks. Sunrun plummeted by 39.5%, Enphase Energy fell by 19.8%, and First Solar dropped by 5.5%.
Early Thursday saw healthcare stocks decline after the Centers for Medicare & Medicaid Services announced an impending expansion of their Medicare Advantage Plan audit. UnitedHealth Group decreased by 1.2%, while Humana saw a 5.2% drop.
Wall Street provided some economic updates on Thursday.
The number of Americans filing for unemployment claims decreased slightly last week. Despite ongoing concerns among businesses regarding economic uncertainty amid the trade conflict, overall job market strength remains robust.
The market exhibited growth across both regions in May following a slump in April, supported by a report that exceeded expectations in US manufacturing and service sectors.
“We are dedicated to offering a comprehensive range of services to our customers,” stated Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
The report highlights worries about how the trade war might affect supply chains, pricing, and future economic conditions. New business orders were a key factor in the improvement, but many stemmed from companies that could be impacted by tariffs potentially hitting the economy in July.
“Supply shortages linked to tariffs and rising price concerns have led to the most significant accumulation of recorded input inventory since the survey data was first collected 18 years ago,” Williamson mentioned.
The 90-day suspension of some of President Donald Trump’s heaviest tariffs has provided some temporary relief to businesses and consumers battling the effects of various tariffs and their implications on prices of numerous goods from trading partners globally, including China, Canada, and Mexico.
According to the S&P Global Report, the overall increase in prices charged for goods and services in May was the steepest observed since August 2022.
Companies are cautioning investors regarding high costs attributed to tariffs and are advising many to revise or retract financial forecasts. Numerous firms, including retail giant Walmart, are alerting consumers that elevated import taxes are prompting them to raise prices across a broad assortment of products.
In international markets, stock indices across Europe and Asia have dipped. France’s CAC 40 decreased by 0.7%, Hong Kong’s Hang Seng fell by 1.2%, while South Korea’s Kospi slid by 1.2%, marking some of its sharper losses.
___
AP business writers Matt Ott and Yuri Kageyama contributed.
Source: apnews.com