Wall Street Halts Rout, But Fiscal Worry Lingers: Markets Wrap

Wall Street showed signs of stabilization just a day after a Treasury selloff that shook markets around the globe, with stocks halting a slide amid a rebound in bonds. The dollar also advanced.

Following the worst equity rout in a month, the S&P 500 edged up. A rally in the world’s biggest technology companies drove the market higher, even though most of the benchmark’s industries retreated on Thursday. Long-term US government bonds, which had led the recent selling on concerns about the nation’s surging debt load, wiped out earlier losses. Bitcoin topped $111,000.

“Equities are cooling off from short-term overbought conditions. Still, a healthy pause/consolidation phase seems more likely than another significant decline,” said Craig Johnson at Piper Sandler.

With traders taking cues from the bond market, the still elevated level of yields kept a lid on riskier bets. Investors are concerned that President Donald Trump’s signature tax bill that narrowly passed the House would boost the nation’s already swelling deficit.

That reinforces what many in financial markets have been highlighting: Unless the US gets its finances in order and soon, the perceived risks of lending to the government will increase, and borrowing costs on long-term Treasury debt will climb even further. That would make reducing the deficit even harder and lift the cost of money for households and companies throughout the economy.

“Market volatility has resurfaced amid renewed uncertainty surrounding trade policy and the fiscal outlook,” said Mark Haefele at UBS Global Wealth Management: “With bond yields elevated and tariff and budget risks in focus, this volatility may persist as investors monitor further developments in policy.”

On the economic front, US business activity and output expectations improved as trade-related anxiety eased even as price pressures continued to mount. In a sign of a still healthy labor market, initial jobless claims dropped to the lowest in four weeks. Meantime, existing home sales unexpectedly fell to the slowest pace in seven months.

The S&P 500 was little changed. The Nasdaq 100 added 0.4%. The Dow Jones Industrial Average wavered.

The yield on 10-year Treasuries declined four basis points to 4.56%. The $18 billion 10-year TIPS auction at 1 p.m. New York time will test whether favorable valuation metrics can overcome the recent surge in long-maturity Treasury yields. A dollar gauge added 0.1%.

• The Justice Department is probing whether Alphabet Inc.’s Google violated antitrust law with an agreement to use the artificial intelligence technology of a popular chatbot maker, according to people with knowledge of the matter. 

• Insurers like UnitedHealth Group Inc. and Humana Inc. sank as the Trump administration plans to expand government audits of private Medicare health plans.

• President Donald Trump said Wednesday evening that he was giving “very serious consideration to bringing Fannie Mae and Freddie Mac public” after more than a decade of being under government oversight. The shares climbed.

• Michael Saylor’s Strategy plans to sell up to $2.1 billion of 10% perpetual strife preferred stock. The latest offering hit as Bitcoin rose to an all-time high.

• Ralph Lauren Corp. expects its strong revenue growth to ease in the latter part of the year, striking a cautious note on US consumer spending.

• Nike Inc. is returning to Amazon.com Inc.’s online store after leaving it in 2019, part of efforts by the world’s largest sportswear company to renew growth and mend ties with key wholesale partners.

• Advance Auto Parts Inc. soared after reporting comparable sales that fell less than expected in the first quarter.

• Walmart Inc. is cutting corporate staff in the company’s headquarters in Bentonville, Arkansas, and other offices, people familiar with the matter said, as the world’s biggest retailer looks to trim costs and contends with economic volatility.

• AT&T Inc. agreed to buy the consumer fiber operations of Lumen Technologies Inc. for $5.75 billion, expanding its fast broadband service in major cities like Denver and Las Vegas.

• Novo Nordisk A/S is selling its blockbuster weight-loss drug Wegovy to new patients at $199 for the first month as easy access to cheaper copycats comes to an end.

• Snowflake Inc. gave a strong outlook for quarterly sales after launching a slew of new products over the last year.

• Zoom Communications Inc. reported revenue from enterprise customers that topped analysts’ estimates, suggesting stronger sales among its expanded suite of products.

• Toronto-Dominion Bank said it will cut about 2% of its workforce as part of a restructuring program begun in the second quarter following its historic anti-money laundering settlement.

• Deutsche Bank AG has reduced its exposure to companies that are sensitive to the new US tariffs, after the German lender conducted a series of internal stress tests.

• Manchester United Plc slumped after the football club lost an all-or-nothing Europa League final against English rival Tottenham Hotspur.

• Lenovo Group Ltd. reported a worse-than-expected 64% drop in earnings, reflecting competitive pressures in the AI server and PC markets.

• Rio Tinto Group has started the hunt for a new chief executive officer after announcing that Jakob Stausholm will step down later this year.

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 11:35 a.m. New York time

• The Nasdaq 100 rose 0.4%

• The Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 fell 0.7%

• The MSCI World Index fell 0.2%

• Bloomberg Magnificent 7 Total Return Index rose 1.2%

• The Russell 2000 Index fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro fell 0.4% to $1.1286

• The British pound was little changed at $1.3426

• The Japanese yen fell 0.1% to 143.86 per dollar

Cryptocurrencies

• Bitcoin rose 2.7% to $111,256.51

• Ether rose 6.7% to $2,677.28

Bonds

• The yield on 10-year Treasuries declined four basis points to 4.56%

• Germany’s 10-year yield was little changed at 2.64%

• Britain’s 10-year yield was little changed at 4.75%

Commodities

• West Texas Intermediate crude fell 1.2% to $60.84 a barrel

• Spot gold fell 0.7% to $3,292.40 an ounce