Trump's Tax Bill Sparks Financial Debate and Market Fluctuations

President Trump's tax bill narrowly passed in the House, potentially adding $3.8 trillion to national debt. Market reactions were mixed, with utilities and energy sectors declining. Long-term Treasury yields remained high, and concerns over growing U.S. debt affected investor sentiment despite a temporary U.S.-China trade truce.

The S&P 500 experienced a decline amid volatile trading following the House's narrow approval of President Donald Trump's tax bill on Thursday. This legislation, if enacted, promises to increase the national debt by $3.8 trillion over the next decade, according to estimates from the Congressional Budget Office.

The tax bill, part of Trump's populist agenda, offers tax breaks in areas like tips and car loans while boosting military spending. Nonetheless, its passage faces a challenge in the Senate, and investors responded with caution. Key stock indices, including the Dow Jones Industrial Average and the S&P 500, saw losses, while the Nasdaq recorded slight gains. Utilities and energy sectors were among the top decliners, dropping over 1% each.

Despite these market dynamics, megacap growth stocks including Alphabet advanced, albeit amid concerns over the potential end to certain green-energy subsidies. Meanwhile, Treasury yields maintained their multi-month highs as investors remained wary of the national debt's implications. Fed Governor Christopher Waller indicated that future rate cuts could be influenced by the administration's approach to tariffs.

(With inputs from agencies.)