Stocks drift as worries about the US government’s soaring debt continue
By STAN CHOE and DAMIAN J. TROISE, AP Business Writers
NEW YORK (AP) — Stocks on Wall Street are experiencing a period of uncertainty on Thursday, following a tumultuous week driven by concerns in the bond market regarding the U.S. government’s debt.
As of 12:53 p.m. Eastern time, the S&P 500 inched up 0.1%, rebounding from a significant loss that could potentially mark its worst week in two months. The Dow Jones Industrial Average saw a 0.1% increase of 33 points, while the Nasdaq composite rose by 0.5%.
Technology stocks are leading the market, with the majority of S&P 500 stocks experiencing losses offset by gains from high-value technology companies. Alphabet, Google’s parent company, surged by 2.7%, and Nvidia climbed by 0.8%.
The recent fluctuations in the market, including a sharp decline on Wednesday, come after weeks of mostly positive performance that brought the S&P 500 close to its all-time high.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, noted, “We’ve had a good bounce here, but the market is looking for some excuse to take some money off the table.”
Treasury yields in the bond market have been relatively stable, despite earlier sharp swings, reflecting the focal point of Wall Street activity this week. The rise in yields is partly attributed to concerns about the escalating U.S. government debt.
The House of Representatives passed a bill early Thursday that proposes tax cuts potentially adding trillions of dollars to the U.S. debt.
Higher Treasury yields can have several implications on the economy, including increased borrowing costs for the government, which may trickle down to households and businesses. Additionally, higher yields can deter investors from paying premium prices for stocks and other investments.
The House’s multitrillion-dollar spending bill, aiming to extend tax breaks from President Trump’s first term while introducing new ones, is expected to undergo modifications in the Senate.
Notably, the legislation includes an accelerated rollback of production tax credits for clean energy projects, leading to sharp declines in shares of solar companies like Sunrun, Enphase Energy, and First Solar.
Healthcare stocks also experienced losses after the Centers for Medicare & Medicaid Services announced immediate expansions to auditing Medicare Advantage plans.
Economic updates on Thursday revealed a slight decrease in the number of Americans filing unemployment claims. Despite a solid employment market, businesses remain cautious due to economic uncertainties amid ongoing trade tensions.
Earlier positive reports on manufacturing and services in the U.S. contributed to market gains before retracting. The survey from S&P Global showed growth in both sectors in May following a sluggish April.
Chris Williamson, chief business economist at S&P Global Market Intelligence, commented, “Business confidence has improved in May, with gloom about prospects for the year ahead lifting somewhat due to the pause on higher rate tariffs.”
The report highlighted the impact of the trade war on supply chains, prices, and concerns about future economic stability. A surge in new orders was driven by businesses preparing for potential tariffs expected to impact the economy in July.
The temporary pause on certain tariffs provided relief to some businesses and consumers grappling with broader tariff implications on goods from various trading partners.
Stock markets in Europe and Asia experienced declines, with France’s CAC 40, Hong Kong’s Hang Seng, and South Korea’s Kospi among the notable losers.
AP Business Writers Matt Ott and Yuri Kageyama contributed.
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