A spike on Wednesday in yields on 10- and 30-year US bonds sent stocks sharply lower amid revived worries about a sell-off in US assets comparable to one earlier this spring before Trump retreated from some of his most onerous tariffs.
But bond yields retreated somewhat later on Thursday, boosting equities a little.
The Dow Jones finished flat at 41,859.
The S&P 500 lost less than 0.1 percent at 5,842, while the Nasdaq climbed 0.3 percent to 18,925.
The rise in yields had “gone a little bit too far,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
The bill extends for 10 years tax cuts enacted under Trump’s 2017 legislation, while enacting cuts to social safety net programmes.
While investors welcome the tax cuts, they have been unnerved by forecasts that the proposal will add trillions of dollars in US debt.
Fernandez noted that the Senate will now weigh in on the bill, which could mean big changes.
“I still think we’re quite a ways from seeing what actually happens,” she said.
Jack Ablin of Cresset Capital Management said the shift in the bond market also reflects short-term dynamics after Wednesday’s poor US Treasury auction sent yields sharply higher.
“Investors are turning their attention back to the day rather than the structural dynamics,” Ablin said.
Among individual companies, Nike rose 2.2 percent after announcing it will increase prices on many items in the United States next month, but did not blame President Donald Trump’s tariffs for the move. (AFP)
