Stocks fall, Dow down 800 points as bonds tank amid tax debate. Bitcoin hits fresh high.
U.S. stocks tumbled as the contours of the White House's tax plan began to solidify, signaling steeper inflation.
The Dow Jones Industrial Average was off 1.7%, losing 704 points to trade near 41,973 in the mid-afternoon, while the broad S&P 500 Index lost 1.2%, or 76 points, near 5,865. The tech-heavy Nasdaq Composite, which had turned positive in the late morning, shed 191 points, or 1%, to touch 18,952.
Investors are worried about higher bond yields, which translate to heftier borrowing costs for corporations, individuals, and governments. Bonds have sold off because the deficit is projected to spiral higher if the White House tax bill becomes law. Meanwhile, President Donald Trump's tariffs, even scaled back over the short term, are likely to nudge consumer prices higher.
Bond yields rise when prices fall, and vice versa. The key long bond, which hasn't settled above 5% since October 2023, closed at 5.09%, up 12 basis points for the day.
Oil prices ticked down after jumping on earlier media reports that Israel might be preparing for a potential strike on Iranian nuclear facilities. Gold gained nearly 1%.
Cryptocurrency
The Texas House of Representatives approved a state bitcoin reserve bill, sending the crypto-related legislation to the governor’s desk for a likely signature. The bill allows Texas to stockpile bitcoin and potentially other cryptocurrencies. The state comptroller would have control of the reserve and any potential buying and selling of the digital assets.
Bitcoin was up 1.6% after the closing bell on Wall Street, near $107,040 at last check, after briefly topping $109,000 for a fresh record high.
Corporate earnings
Shares of UnitedHealth closed down 5.1% after reports that the company made secret payments to nursing homes to reduce hospital transfers. The healthcare company has been under fire for months, including the aftermath of the murder of its insurance arm's CEO.
Homebuilder Toll Brothers topped analysts' forecasts in its second fiscal quarter. The stock gained in the morning but slipped along with the rest of the market in the afternoon.
Palo Alto Networks beat Wall Street forecasts in its most recent quarter but gross margins missed. Shares slid 6.5%.
Before the bell, big-box retailer Target cut its full-year sales outlook, citing consumer uncertainty around consumer spending due to tariffs and backlash to a rollback of DEI efforts. Sales in the first three months of the year also fell short of analysts' expectations. Target competitor Walmart is embroiled in a war of words with President Donald Trump over its statement that tariffs will cause the chain to raise prices. Target shares lost 4.4%
Home improvement retail chain Lowe's reported earnings in the first three months of the year that topped Wall Street forecasts. Shares closed down 2.1%.