The Republican-led upper congressional chamber narrowly cleared the US President’s mammoth domestic policy bill, sending the measure back to the House of Representatives, where the vote is also expected to be close.
Equity market viewers have cheered the prospects of extending tax cuts while expressing misgivings about projections that the measure will add some US$3 trillion to the US national debt.
The Dow Jones Industrial Average rose 0.9 percent to 44,494. But the broad-based S&P 500 dipped 0.1 percent to 6,198, while the tech-rich Nasdaq Composite Index dropped 0.8 percent to 20,202.
Both the S&P 500 and Nasdaq closed at records on Monday.
Data released on Tuesday showed US manufacturing activity shrank in June for a fourth straight month, though by a slower rate than the prior month.
The report comes ahead of key US data later in the week, including the closely watched monthly jobs report.
Among individual companies, Tesla fell 5.3 percent as the electric car company’s CEO Elon Musk sparred with Trump over the tax and spending bill.
After Musk lambasted the legislation as wasteful and misguided, Trump warned of retribution against Tesla and other Musk ventures.
“This high-profile feud introduces political risk,” Briefing.com said of the tiff.
“The personal nature of the conflict, amplified by Trump’s comments implying Tesla’s reliance on subsidies for survival, has sparked fears of broader policy shifts targeting Musk’s business empire. This political uncertainty undermines investor confidence.”
Meanwhile, rival automakers General Motors and Ford jumped 5.7 percent and 4.6 percent respectively, after reporting higher second-quarter US auto sales, as consumers accelerated purchases to get ahead of US tariffs. (AFP)
