U.S. stocks declined on Tuesday, with the S&P 500 ending a six-day winning streak. The drop came as rising Treasury yields put pressure on the market, drawing attention to the U.S. government’s debt situation.
President Donald Trump visited Capitol Hill to urge Republican lawmakers to approve a major tax-cut bill. Analysts warn this plan could increase the federal debt by $3 trillion to $5 trillion, adding to the current $36.2 trillion debt.
The Dow Jones Industrial Average fell 114.83 points, or 0.27%, closing at 42,677.24. The S&P 500 dropped 23.14 points, or 0.39%, to 5,940.46. The Nasdaq Composite lost 72.75 points, or 0.38%, ending at 19,142.71.
Eight of the 11 sectors in the S&P 500 saw losses. Energy, communication services, and consumer discretionary stocks led the declines. Meanwhile, utilities, healthcare, and consumer staples posted gains.
Garrett Melson, a portfolio strategist at Natixis Investment Managers, said the market needed a pause after recent gains. He noted some underlying market activity and pointed out that bond yields were rising again after a recent surge.
Investors are also watching comments from Federal Reserve officials about future monetary policy. St. Louis Fed President Alberto Musalem is among those closely followed.
Major credit rating agencies, including Moody’s, Fitch, and S&P Global, have downgraded the U.S. sovereign credit rating due to concerns about the government’s debt levels.
Market expectations suggest at least two interest rate cuts by the Federal Reserve before the end of 2025, with the first likely in September. The yield on the 10-year U.S. Treasury note rose slightly to 4.481%.
In corporate news, Home Depot shares fell 0.6% after the company reported first-quarter sales that beat estimates but reversed earlier gains. Tesla shares rose 0.5% after CEO Elon Musk reaffirmed his commitment to remain CEO for the next five years. Other tech stocks, including Nvidia, declined ahead of upcoming earnings reports.
The market’s recent pause reflects caution amid rising yields and ongoing concerns about fiscal policy and debt levels. Investors remain alert to developments in both government actions and Federal Reserve signals.
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