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Wall Street is getting jumpy again, and this time, it’s not about tariffs. Traders are now locked onto Congress, where budget negotiations are stalling and blue state Republicans are throwing up roadblocks. The House’s massive federal budget bill hit a hard pause Tuesday when several GOP lawmakers refused to support it without a bigger write-off for state and local taxes, known as SALT. That demand is now threatening to derail the entire timeline for passage. Even with President Donald Trump getting directly involved in the talks, the standoff continues. The Republican leadership had initially aimed to pass the bill before Memorial Day weekend, but that goal is fading fast. And even if lawmakers in both chambers somehow reach a deal, the final version is expected to add more government debt, piling onto America’s already eye-watering $36 trillion deficit. The SALT issue has become a battle line. Republicans from states with high local taxes want the bill to allow a larger deduction, or they won’t vote for it. Their threat is serious enough that it’s delayed everything. Trump has been actively pushing behind closed doors, but his efforts haven’t yet unlocked the gridlock. The delay is making investors nervous, and they’re watching every move from Washington like hawks. The bigger concern is what comes after a deal… the consequences. If this bill goes through, analysts say it’s going to flood the bond market with more Treasury debt, which will likely drive interest rates up and hurt investor demand. Solita Marcelli, Chief Investment Officer for the Americas at UBS Global Wealth Management, said in a Tuesday note that Trump’s bill “is likely to see various amendments before it is passed in the two chambers of Congress and signed into law, but it nonetheless is expected to add trillions of dollars to the country’s [$36 trillion] deficit over the next decade.” She warned that this could push the supply of Treasury debt even higher, which means more strain on the bond market. At the same time, Stephen Juneau, a US economist at Bank of America , warned of a possible “bond-buyer-strike.” In his note, also released Tuesday, Juneau wrote, “Adding more supply to the market at a time when demand is softening could result in a spike in borrowing rates, a decline in the dollar, and a drop in equities. This could overwhelm any growth effects from the bill itself.” And the markets are already reacting. On Tuesday night, the S&P 500 closed down, breaking a six-day winning streak. The Nasdaq dropped too, logging its first red day in three sessions. The Dow Jones Industrial Average lost more than 100 points, snapping a three-day climb. By early Wednesday, futures tied to all three major indexes were also sliding. The S&P 500 and Nasdaq futures both dropped 0.3%, while the Dow gave up 120 points, or 0.28%. Investors had been hopeful just a few weeks ago. After Trump unveiled steep import tariffs back on April 2, markets dipped briefly, then staged a fast rebound. That rally had lifted all three indexes above their April levels, with the S&P 500 clawing back into the green for the year. The 30-year Treasury yield is now hovering just below 5%, a level not seen in years. Rising yields mean falling bond prices, and that spells trouble for a market already unsure about what comes next. Add the Moody’s credit downgrade from last week to the mix, and the pressure is stacking up fast. Meanwhile, the budget bill , originally billed as Trump’s “one big, beautiful bill,” may still pass, but not without wrecking confidence along the way. And until Congress figures out how to deal with SALT, debt, and the deficit without wrecking demand in the bond market, Wall Street has no choice but to sit and wait—with one eye on the headlines and the other on portfolios. There’s no major economic data scheduled for Wednesday, so for now, all eyes stay glued to Congress and the growing federal deficit. KEY Difference Wire : the secret tool crypto projects use to get guaranteed media coverage

President Donald Trump claimed the U.S. economy is “roaring,” citing March’s addition of 228,000 jobs. He credited his administration’s economic approach for strengthening the labor market and reviving manufacturing in key industrial states. He emphasized new industrial activity across the Midwest and South, pointing to recent factory openings and domestic hiring. Trump described the data as proof that economic momentum is shifting in America’s favor. Despite the uptick in jobs, official data shows the U.S. gross domestic product (GDP) contracted by 0.6% in the first quarter of 2025. Economists link the decline to trade disruptions and weaker consumer activity, highlighting mixed signals for the economy’s overall health. On April 2, Trump’s administration introduced broad import duties, i ncluding a general 10% levy and higher rates on Chinese goods. He framed the move as essential to protecting U.S. industries and restoring trade balance. Following the announcement, global equity markets tumbled. The Dow Jones Industrial Average dropped sharply, while other major indices registered losses. International partners responded with warnings of retaliatory measures. In the U.S., prices for electronics, food, and consumer goods rose almost immediately. Retailers reported tighter margins and higher logistics costs, adding strain to households already grappling with inflation. April saw a 0.9% increase in overall consumer prices, with imported goods showing the highest jumps. At the same time, core inflation eased slightly, suggesting some sectors experienced slower price growth. White House officials cited the core reading as a sign of stabilization. They linked the improvement to deregulation and increased supply chain control within U.S. borders. Financial institutions expressed caution. Moody’s downgraded the nation’s credit outlook earlier this month, and banking analysts warned that fiscal strategies might face long-term resistance from higher input costs. Democrats responded critically to Trump’s economic remarks. Senate Majority Leader Chuck Schumer pointed to the GDP decline and unstable markets as signals of deeper systemic issues. Senator Elizabeth Warren raised concerns about affordability for essential goods. She pressed for policies aimed at protecting working families from sudden price shifts tied to global supply pressures. Republican allies defended the tariffs, saying short-term disruptions are necessary for broader strategic gains. Meanwhile, Trump framed his critics as unwilling to accept shifting trade dynamics. Investors showed limited reaction following Trump’s May 20 comments. The S&P 500 closed modestly lower, and trading volumes remained subdued across most sectors. Market analysts cited ongoing tariff uncertainty and global supply challenges as reasons for investor hesitation. They await upcoming data releases for clearer signals on direction and policy impacts. Energy, tech, and manufacturing sectors all posted mixed results. With no clear movement, financial strategists say markets are in wait-and-see mode until new fiscal plans are revealed. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

Tariffs continue to be in focus during today’s trading session, as Walmart and Home Depot shared differing views on their impact. U.S. markets are still assessing the effect of tariffs on consumers. On Tuesday, May 20, the Dow Jones was trading at 42,679.23, down 112.84 points or 0.26%. The S&P 500 was at 5,942.07, down 0.36%, while the Nasdaq stood at 21,353, down 0.44%. Just days after Walmart announced potential price hikes due to U.S. tariffs, Home Depot offered a different perspective. In its first-quarter 2025 earnings report, the home improvement giant stated that it plans to keep prices steady. Rather than raising prices, the company has opted to shift production away from China, which currently faces an effective tariff rate of 30%. Still, Home Depot’s announcement may not be enough to lift sentiment. Wall Street analysts continue to warn about the broader economic impact of the recently resumed collection of student loans. The Department of Education under Donald Trump has resumed collections on student loans that had been paused for five years. This applies to borrowers in default, who may now face wage garnishment. Notably, JPMorgan estimated that renewed collections could reduce disposable personal income somewhere between $3.1 billion and $8.5 billion. Bank of America’s analyst Mihir Bhatia noted that low-end consumers will particularly feel the weight of this new policy. Against this backdrop, May’s preliminary consumer sentiment index has dropped to the second-lowest level on record. The index, which measures consumers’ willingness to spend, fell to 50.8 — the lowest reading aside from June 2022. Still, despite bad news for Wall Street and Main Street, Bitcoin (BTC) is resilient, trading at $106,323 and up 0.98% in the last 24 hours. Gold showed even stronger performance, up 1.78% to $3,287 per ounce.

U.S. stocks were little changed Monday as investors reacted to Moody’s Ratings stripping the U.S. of its last triple-A credit grade and lawmakers advancing a tax bill expected to add significantly to federal deficits. The S&P 500, coming off a five-day winning streak, rose slightly, while the Nasdaq Composite rose 0.01%. The Dow Jones Industrial Average rose 0.3%, with support from a rebound in UnitedHealth Group shares. Moody’s late Friday downgraded U.S. debt to AA1, citing “persistent, large fiscal deficits” and higher interest costs. The move came as the House Budget Committee approved a tax-and-spending plan from President Trump that would extend cuts and boost spending, raising deficit projections. The 10-year Treasury yield briefly spiked to 4.56%, its highest level in over a month, before pulling back to 4.46%. Yields on 30-year Treasurys touched 5% before settling near 4.95%. The dollar index fell 0.7%, while gold jumped 1.5% to $3,235 an ounce. Tech stocks, which led recent gains, traded mixed. Tesla dropped 2% following last week’s 17% rally. Apple slipped 1.5%, while Nvidia, Alphabet, and Meta also declined. Microsoft and Amazon edged higher. Bitcoin ( BTC ) surged to $105,400, lifting shares of Strategy 3%. Palantir, AMD, and Super Micro Computer each fell over 2%. JPMorgan CEO Jamie Dimon warned that the full economic impact of tariffs had yet to be felt, while Fed officials signaled no immediate changes to interest rates amid ongoing uncertainty. Global markets were mixed. European stocks rose slightly, while Asia saw losses. The European Union cut its growth outlook, and Diageo forecast a $150 million hit from tariffs.

A few days ago, Moody’s downgraded the US sovereign credit rating from Aaa to Aa1, which marked the first time in over a century that the US no longer holds a top-tier rating from any major credit agency. Driven by escalating national debt and persistent fiscal deficits, the decision has sent ripples through global financial markets, particularly in the United States. For instance, US stock futures declined sharply following the downgrade, with futures tied to the Dow Jones Industrial Average falling by 0.79%, the S&P 500 dipping 0.97%, and the Nasdaq 100 dropping 1.19%. The bond market was hit as well, where the yield on the 30-year US Treasury bond surged to 5.03%. This is the highest level since November 2023, indicating increased borrowing costs for the government. Surprisingly, gold wasn’t spared either, with prices crashing by more than 2% on Friday. However, it started to recover a bit, considering that the price rose more than 1% today. Being the well-known safe-haven likely helped gold with the recovery, in combination with the weaker dollar. But why did this all happen? According to Moody’s, there are several reasons, with rising debt levels being among the top ones. Namely, the US national debt has reached $36 trillion, with projections indicating a debt-to-GDP ratio will escalate from 98% in 2024 to 134% within a decade. Continuous budget deficits without substantial fiscal reforms have raised concerns about the government’s financial stability, while political divisions have hindered the implementation of measures to address the growing debt. In other words, the government’s ability to respond to economic challenges is inadequate. Almost at the same time, new US Treasury data revealed that in March, China’s holdings of US Treasury bonds decreased, marking the first time this century that the UK held a larger share of US bonds than China. This might add some additional concern for the US, especially taking into account that this occurred only a few weeks after the April market upheaval, which included a significant Treasury selloff alongside drops in stock, bond, and dollar values. Some in the US downplayed the situation, like the US Treasury Secretary Scott Bessent. He labeled Moody’s as a lagging indicator, saying that the current economic situation is due to Biden’s administration policies. Still, while the immediate market reactions have been notable, the long-term effects of the downgrade remain uncertain, and we’ll probably have a clearer picture in the near future. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.