The S&P 500 slipped 2.60 points, or less than 0.1%, closing at 5,842.01, while the Dow Jones Industrial Average dipped 1.35 points to finish at 41,859.09. The Nasdaq Composite managed a modest gain, rising 0.3% to 18,925.73, buoyed by strong performances from major tech firms.
The volatile trading occurred after a major market decline on Wednesday which sent the S&P 500 index toward its worst weekly performance since mid-August. The market experienced a recent surge but the ongoing worries about fiscal policies specifically regarding the House-passed multi-trillion-dollar tax bill have brought back market volatility.
The bill which President Donald Trump supports extends income tax cuts and introduces new overtime and tipped wages exemptions. Although the legislation wins political support it will generate major increases in the national deficit which puts additional pressure on the heavily burdened bond market.
Treasury yields continued to climb this week, with the 10-year note hitting multi-month highs. Higher interest rates increase financial costs for corporations especially for sectors that depend heavily on rates including housing and finance and technology.
Still, tech stocks helped offset broader losses. The stock prices of Alphabet rose 1.4% and Nvidia increased by 0.8% as investors supported major tech companies with promising profit prospects.
Scott Wren from Wells Fargo Investment Institute stated that the market looks for any reason to withdraw funds from its current positive trend.
Most investors maintain a positive outlook about long-term growth despite the debt-related market downturn. Market observers are waiting for Senate action because Trump’s tax bill needs to overcome stronger opposition during its Senate review process.
Debt concerns and policy uncertainty continue to create market uncertainty in the present period.
