The benchmark S&P 500 edged lower in choppy trading on Thursday after the U.S. House of Representatives voted to pass President Donald Trump’s tax bill, which is expected to burden the country with trillions of dollars in extra debt, by a razor-thin margin.
If what Trump has described as a “big, beautiful bill” becomes law, it is expected to add about $3.8 trillion to the federal government’s $36.2 trillion debt in the next decade, according to the nonpartisan Congressional Budget Office.
The bill now faces a test in the Republican-controlled Senate and will fulfill much of Trump’s populist agenda if passed, delivering new tax breaks on tips and car loans and boosting military expenditure.
“For all that the government has been trying to reduce government spending and the overall debt level, it seems that this bill is basically going to undo all that they have done,” said Sam Stovall, chief investment strategist at CFRA Research.
At 09:49 a.m. ET, the Dow Jones Industrial Average fell 72.70 points, or 0.17%, to 41,790.95, the S&P 500lost 8.11 points, or 0.14%, to 5,836.38, and the Nasdaq Composite gained 28.91 points, or 0.15%, to 18,901.55.
Nine of the 11 S&P sub-sectors traded lower, with utilities and energy among top decliners and down more than 1% each.
Wall St drops, Treasury yields rise after Moody’s downgrade
Longer-dated Treasury yields stayed near their multi-month highs, with those on the 10-year benchmark at 4.606% and the 30-year Treasury yield at a new 19-month high.
Most megacap and growth stocks inched higher, though Alphabet outpaced the pack with a 3.4% rise.
Shares of solar energy companies including First Solar dropped 4.1% as Trump’s tax bill is expected to end a number of green-energy subsidies.
Snowflake jumped 9% after the cloud computing firm raised its fiscal-year 2026 product revenue forecast.
All three main stock indexes had witnessed their biggest single-day percentage drops in a month on Wednesday as Treasury yields spiked on worries about mounting U.S. debt.
U.S. stocks have had a solid month so far, with the S&P 500 climbing more than 15% from its April lows, when Trump’s reciprocal tariffs roiled global markets.
A pause in tariffs, a temporary U.S.-China trade truce and tame inflation data have pushed equities higher, although the S&P 500 is still about 3% off record highs.
Fed Governor Christopher Waller said in an interview to Fox Business that central bank rate cuts would be on the menu if the Trump administration’s tariff agenda settles on the lower side of the ledger.
Traders currently see at least two 25-basis-point rate cuts by the end of the year, according to data compiled by LSEG.
On the data front, U.S. business activity picked up in May, while separate data showed jobless claims dropped last week, suggesting that the economy maintained a steady pace of employment growth.
Declining issues outnumbered advancers by a 3.3-to-1 ratio on the NYSE and by a 1.82-to-1 ratio on the Nasdaq.
The S&P 500 posted no new 52-week highs and nine new lows, while the Nasdaq Composite recorded 20 new highs and 59 new lows.
American Dollar Exchange Rate