U.S. equities lost ground on Wednesday as investors grew increasingly cautious over surging Treasury yields and the looming impact of a new budget bill in Washington. The Dow Jones Industrial Average fell 322 points, or 0.8 percent. The S&P 500 slipped 0.3 percent, while the Nasdaq managed to gain 0.2 percent.
Yields were once again in focus. The 30-year Treasury bond rose past the 5 percent mark, while the 10-year yield climbed above 4.53 percent. These levels, which spiked earlier in the week following Moody’s downgrade of U.S. government credit, continue to rattle investors.
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Much of the tension stems from Capitol Hill, where Republican lawmakers are working to push through a new tax-cut-heavy budget bill. While the measure promises relief on taxes, internal party disputes over deductions, particularly for state and local taxes, have created friction. Markets are also wary that the plan could deepen the deficit at a time when fiscal discipline is already under scrutiny.
On the corporate front, UnitedHealth sank more than 5 percent, making it the worst performer on the Dow after HSBC downgraded the stock, citing persistent valuation concerns. Tech stalwarts Apple and Amazon also slipped over 1 percent each as rising yields weighed on growth stocks.
Retail bellwether Target also weighed on sentiment, with shares dropping 3.5 percent after it missed revenue estimates for the first quarter and revised its full-year outlook lower. The company pointed to softer discretionary spending, uncertainty over trade policy, and consumer pushback over changes to its diversity and inclusion policies.
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The session marked another day of turbulence for Wall Street. The S&P 500 saw its six-day winning streak come to an end on Tuesday, while the Nasdaq logged its second loss in three days. Still, markets remain well off recent lows—the S&P 500 and Nasdaq are up more than 14 percent and 19 percent, respectively, over the past month, rebounding sharply after last month’s sell-off triggered by the Trump administration’s fresh wave of tariffs on imports.
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