Wall Street’s main indexes were on track for a lower open on Thursday after the U.S. House of Representatives passed President Donald Trump’s tax bill, which is expected to burden the country with trillions in debt, by a razor-thin margin.
If the bill becomes law, it is expected to add about $3.8 trillion to the federal government’s $36.2 trillion debt in the next decade, according to the nonpartisan Congressional Budget Office.
It now faces a test in the Republican-controlled Senate and will fulfill much of Trump’s populist agenda if passed, delivering new tax breaks on tips and car loans and boosting military expenditure.
"For all that the government has been trying to reduce government spending and the overall debt level, it seems that this bill is basically going to undo all that they have done," said Sam Stovall, chief investment strategist at CFRA Research.
At 08:32 a.m. ET, Dow E-minis were down 230 points, or 0.56%, S&P 500 E-minis shed 28.25 points, or 0.48%, and Nasdaq 100 E-minis lost 92.75 points, or 0.44%.
All three main stock indexes witnessed their biggest single-day percentage drops in a month on Wednesday as Treasury yields spiked on worries about mounting U.S. debt.
Longer-dated Treasury yields stayed near their multi-month highs on Thursday, with those on the 10-year benchmark at 4.622%.
Most megacap and growth stocks reversed premarket gains, with Tesla (NASDAQ:TSLA) leading losses with a nearly 2% fall.
Shares of solar energy companies including First Solar (NASDAQ:FSLR) dropped 4.3% as Trump’s tax bill is expected to end a number of green-energy subsidies.
Cryptocurrency and blockchain-related stocks jumped as bitcoin, the world’s biggest cryptocurrency, climbed to a record high.
Exchange operator Coinbase (NASDAQ:COIN) advanced 1.4%, bitcoin stockpiler Strategy gained 1.6% and crypto miners including MARA Holdings added 3.7%.
Snowflake (NYSE:SNOW) jumped 8.3% after the cloud computing firm raised its fiscal 2026 product revenue forecast.
Insurer UnitedHealth (NYSE:UNH) extended losses after a nearly 6% drop in the last session and was down 3.5%.
Analog Devices (NASDAQ:ADI) gained 3.2% after the chipmaker forecast third-quarter revenue and profit above Street expectations.
U.S. stocks have had a solid month so far, with the S&P 500 climbing more than 15% from its April lows, when Trump’s reciprocal tariffs rattled global markets.
A pause in tariffs, a temporary U.S.-China trade truce and tame inflation data have pushed equities higher, although the S&P 500 is still about 3% off its record highs.
Fed Governor Christopher Waller said in an interview to Fox Business that central bank rate cuts would be on the menu if the Trump administration’s tariff agenda settles on the lower side of the ledger.
Traders currently see at least two 25-basis-point rate cuts by the end of the year, according to data compiled by LSEG. A preliminary reading of the May Purchasing Managers’ Index is scheduled for release shortly after the opening bell, while separate data showed jobless claims for the week ended May 17 stood at 227,000 versus an estimate of 230,000.