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ALERT: U.S. Economic SHAKEDOWN—Bonds and Stocks CRASH as Trump’s Tax Cuts Loom!
In a heart-pounding twist for Wall Street, U.S. government bonds and stocks took a nosedive following a disastrous Treasury auction that screamed investor panic over our ballooning national debt! Meanwhile, Trump is just moments away from pushing through earth-shattering tax cuts in Congress!
The 30-year Treasury yield skyrocketed to a staggering 5.096%, marking its highest point since late last year, as bond prices plunged into a pit of despair. The S&P 500 index felt the heat, plummeting by 1.6% as the market braced for impact! Bonds did manage a weak recovery during Asian trading, but it’s all smoke and mirrors as futures for the S&P 500 and Nasdaq teetered on the edge.
What’s fueling this chaos? Republican bigwigs in Congress are in an ALL-OUT brawl to push Trump’s “big, beautiful bill” to the forefront. YES, approval is rumored to be just hours away, after a key hurdle was cleared in the House. Trump’s tax cut plan could RACK UP an eye-watering $3 trillion in debt over the next decade!
House Speaker Mike Johnson was seen hustling through the halls, trying to wrangle up support and broker peace among the warring factions in Trump’s own party! The White House even allowed the far-right Freedom Caucus to air their grievances, with top economic advisors dispatched to nag other Republicans into line. “The meeting was productive,” said Press Secretary Karoline Leavitt, but will it be enough to save the day?
All this is happening just DAYS after Moody’s yanked the U.S. of its pristine triple-A credit rating, leaving investors feeling queasy over the skyrocketing deficit. The latest auction of $16 billion in 20-year Treasuries saw interest rates rocket as high as 5%, the highest since these bonds were reintroduced in 2020!
Experts are sounding alarms. Ian Lyngen from BMO Capital Markets said, “We had a soft 20-year auction,” which piled on pressure as the market clearly has a “bias towards higher yields.” It’s an explosive cocktail of rising fear and uncertainty!
Across the pond, European borrowing costs are creeping higher too, showing that it’s not just America feeling this sting. Stock markets are spiraling downwards—the Stoxx Europe 600 index dropping 0.8%, while Germany’s Dax held a similar fate!
Meanwhile, in the tech galaxy, it’s bad news for Big Tech. As OpenAI dropped a staggering $6.4 billion to acquire a hardware start-up, tech stocks took a hit. Apple fell by 2.3%, joined in decline by titans like Amazon, Nvidia, and Microsoft, sending the tech-heavy Nasdaq Composite down 1.4%.
Futures are whispering of a slight uptick on Wall Street tomorrow, but will it be enough to pull the economy back from the brink? Stay tuned—this economic drama is just beginning!
photo credit: www.ft.com
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