New York (AFP) – Wall Street stocks tumbled Wednesday along with the dollar as a bond sell-off signaled investor unease while Congress weighs a tax-cut bill that could push up the US deficit. The yield on the 10-year US Treasury note approached 4.6 percent, its highest level since February, as Trump seeks to unify Republicans in the House of Representatives behind a sweeping bill that would slash taxes and roll back federal spending. Major US indices fell about 1.5 percent or more after a poor US Treasury auction sent bond yields sharply higher.
“Investors are getting worried about the Trump tax bill that is working its way through Congress that is not going to be trimming the debt but actually adding to it,” said Sam Stovall of CFRA Research. “As a result, the bond yields have been moving higher and that is causing investors to be concerned.” Activity on Capitol Hill has taken center stage this week, while top finance leaders from the G7 group of nations gather in Canada for talks touching on the war in Ukraine and trade negotiations in the wake of Trump’s tariff onslaught.
“A bond market crisis is exactly the sort of event that could send stocks tumbling and volatility surging,” said Kathleen Brooks, research director at XTB. “It’s also harder to recover from compared to the man-made tariff crisis,” she added. Bitcoin on Wednesday hit a new record high of $109,499.76, as investors eyed new US legislation on cryptocurrency with optimism. In Europe, London’s FTSE closed slightly up, despite inflation data coming in higher than expected, which analysts said could slow the pace of interest rate cuts by the Bank of England. Germany’s DAX also ended in positive territory, but the CAC in Paris ended lower.
An initial surge in crude prices spurred by a CNN report that Israel was planning a strike on Iranian nuclear sites reversed direction after a surprise announcement by the US Energy Information Administration that the country’s oil stocks had risen last week. Among individual companies, Google parent Alphabet bucked the tide, gaining 2.9 percent after announcing plans to include advertisements into its new AI Mode for online search. The integration of advertising has been a key question surrounding generative artificial intelligence chatbots, which have largely avoided interrupting the user experience with ads.
Target fell 5.2 percent following another disappointing earnings release. The big-box chain, which is contending with tariffs and fallout from a boycott over its reversal on diversity pledges, reported a 2.8 percent drop in sales.
– Key figures at around 2030 GMT –
New York – Dow: DOWN 1.9 percent at 41,860.44 (close)
New York – S&P 500: DOWN 1.6 percent at 5,844.61 (close)
New York – Nasdaq Composite: DOWN 1.4 percent at 18,872.64 (close)
London – FTSE 100: UP 0.1 percent at 8,786.46 (close)
Paris – CAC 40: DOWN 0.4 percent at 7,910.49 (close)
Frankfurt – DAX: UP 0.4 percent at 24,122.40 (close)
Tokyo – Nikkei 225: DOWN 0.6 percent at 37,298.98 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 23,827.78 (close)
Shanghai – Composite: UP 0.2 percent at 3,387.57 (close)
Euro/dollar: UP at $1.1334 from $1.1283 on Tuesday
Pound/dollar: UP at $1.3421 from $1.3393
Dollar/yen: DOWN at 143.66 yen from 144.51 yen
Euro/pound: UP at 84.42 pence from 84.24 pence
Brent North Sea Crude: DOWN 0.7 percent at $64.91 per barrel
West Texas Intermediate: DOWN 0.7 percent at $61.57 per barrel
© 2024 AFP
