Wall Street Indices Stabilize Amid Bond Yield Pressure

The S&P 500 closed nearly unchanged on Thursday (May 22, 2025), recording a marginal decline of 0.04%, as investors remain cautious due to concerns about potential interest rate hikes and the worsening fiscal deficit in the U.S. Similarly, the Dow Jones Industrial Average ended the session without changes, while the Nasdaq recorded an increase of 0.28%. Meanwhile, the yield on the 30-year U.S. Treasury bond surged to its highest level since October 2023 following congressional approval of legislation that could further burden the country’s finances. Congress also passed a bill including tax cuts and increased defense spending, which may significantly raise public debt, with estimates from the Budget Office suggesting costs up to $4 trillion. Investors worry that combined with possible reinstatement of Trump tariffs, this measure could intensify inflationary pressures affecting Treasury yields. Jed Ellerbroek, portfolio manager at Argent Capital Management, stated that while the tax bill is beneficial for short-term economic growth, it exacerbates the fiscal deficit over the long term, negatively impacting markets. The yield on the 30-year Treasury reached 5.161% before retreating towards the end of the session. This upward trend in long-term yields, impacting borrowing costs for households and businesses, might further strain an economy already pressured by new Trump tariffs.