Stock Market Falls Further after Trump’s Budget Bill Moves to Senate
The U.S> budget bill proposed by President Trump is advancing and causing the stock market to dip after it recently surged.
Quick overview
- The U.S. stock market has declined as concerns grow over the national debt linked to the new budget bill.
- President Trump has introduced the 'One Big Beautiful Bill Act,' which proposes significant changes to government spending and jobs.
- The Congressional Budget Office warns that the bill could increase the national debt by $3.8 trillion over the next decade.
- While the stock market has seen minor losses, it remains elevated due to previous gains from the China-U.S. trade deal.
As the new U.S government budget bill moves from the House of Representatives to the Senate, the stock market has dropped further as investors worry about the U.S. deficit.
President Donald Trump calls the new budget bill “One Big Beautiful Bill Act,” and it includes sweeping changes to government jobs, spending, and more. If the bill passes through the Senate, it could quickly become law, and that would mean major changes to the way a lot of government organizations work, making massive changes not just for government employees but for many citizens as well.
While the bill is partly designed to cut government spending, there is concern that it will increase the national debt as well, ballooning it by $3.8 trillion by the next decade. That is according to the Congressional Budget Office, reported by The Economic Times. Because there is lots of fear about the national debt. The stock market has dropped in recent days.
Where the Stock Market Is Headed
It looked like the stock market indices would come out flat on Thursday- the first full day of trading after the budget bill passed the House of Representatives. But as Thursday trading opened, the stock market indices fell further, with the Dow Jones losing 257 points, resulting in a 0.61% decline. The S&P 500 fell too, losing 0.76%, with the Nasdaq Composite dropping 0.97%.
These are not major losses, and they do not pull the stock market down to where it was since the most recent surge. The gains the stock market has made in the last two weeks following the China-U.S. trade deal are mostly intact. That means the stock market is still elevated, and it may continue to stay that way once the week finishes.
We would see a more severe drop if the bill was fully approved and signed into law, but it still has a long and winding process to go through before that happens. For now, it is only fear of the future that is driving the stock market, and there could be other provisions made for the economy and the national debt that investors do not know about yet.
Trump has gone back and forth on tariffs so far during his presidency, and he may do the same thing with this new budget bill. While he has appointed Elon Musk to head up the Department of Government Efficiency in a bid to cut government waste and save money, some parts of this bill seem to conflict with that effort. We will see how those efforts pan out in the coming months.
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