The major stock index of the New York Stock Exchange started the session mixed amid concerns over expanding fiscal deficits and surging Government Bonds yields. The U.S. House of Representatives passed a bill that includes increased government expenditure and a tax cut, leading to a rise in Government Bonds yields and dampening investor sentiment in the stock market.
On the 22nd (local time), the Dow Jones Industrial Average fell by 30.88 points (0.07%) to 41,829.56, while the S&P 500 index decreased by 5.82 points (0.10%) to 5,838.79 at the New York Stock Exchange (NYSE). In contrast, the Nasdaq index rose by 23.42 points (0.12%) to 18,896.06.
On this day, the U.S. House of Representatives passed a bill led by the Republican Party that includes a tax cut and an increase in defense expenditure. If this bill passes the Senate and is enacted, U.S. government fiscal expenditures are expected to increase by trillions of dollars, which could further exacerbate concerns over inflation and rising interest rates. The Congressional Budget Office (CBO) estimates that the total fiscal burden of the bill will amount to about $4 trillion (approximately 5,530 trillion won).
These concerns led to an immediate reaction in the U.S. Government Bonds market. The yield on 30-year U.S. Government Bonds rose again from the previous day, soaring to about 5.1%. This is the highest level since October 2023. The yield on 10-year Government Bonds is also trading close to 4.6%. Long-term interest rates serve as a benchmark for consumer loan interest rates, making this surge an additional burden on the U.S. economy already under pressure from President Trump’s tariff policy.
Meanwhile, on this day, generally all sectors are showing a downward trend. Utilities and energy fell by 1.3%, and healthcare by 0.6%, while communication services increased by 0.3%. By stock, major solar-related stocks are plummeting following the passage of a tax reform bill led by Republicans in the U.S. House. Sunrun's stock price has fallen 42% compared to the previous day, SolarEdge by 24%, Enphase by 18%, and First Solar by 5%.