New York, July 1 EST: The S&P 500 edged up after the Senate passed Donald Trump’s $4.5 trillion tax bill, a sweeping package of cuts and spending that investors see as an economic shot in the arm—but one that adds serious weight to the government’s balance sheet.
The SPDR S&P 500 ETF (SPY) closed at $618.25, up a hair at 0.06%. The Nasdaq-100 ETF (QQQ) didn’t follow—down 0.7% to $547.80, dragged by rate-sensitive tech names that don’t tend to thrive when Treasury yields climb and fiscal discipline starts to look theoretical.
Cyclicals Find a Bid, Tech Hits the Wall
Traders rotated into banks, industrials, and energy—sectors with exposure to real-world activity and balance sheets that benefit when rates rise. But big tech struggled, especially names priced for long-term growth. Tesla, already in a political tug-of-war with Trump over subsidies, led the slide.
It’s the same split we’ve seen all year: the market wants the upside of stimulus, but the long-term math—higher debt, higher yields, tighter Fed—keeps hitting the Nasdaq first.
Yields Up, Patience Thin
The bond market didn’t sit quietly. Treasury yields rose across the curve, reflecting expectations for heavier issuance and fewer near-term rate cuts. This isn’t panic territory yet, but it’s enough to compress valuations for companies that depend on future earnings growth to justify today’s prices.
Fed Chair Jerome Powell has been consistent: policy pivots will follow inflation and labor data, not politics. But this bill, whether Powell likes it or not, changes the fiscal landscape he has to operate in.
Snapshot Numbers
- SPY: $618.25 (+$0.40) | High: $618.80 | Low: $615.53
- QQQ: $547.80 (–$3.84) | High: $551.01 | Low: $544.73
- Volume: SPY ~46.3M | QQQ ~40.1M
What to Watch
The House vote on Wednesday could alter the bill’s trajectory, but markets are already moving on assumptions it will pass in some form. What’s less priced in is the Fed’s response—and the bond market’s appetite for another trillion in issuance.
Friday’s jobs report will set the next tone. For now, the market is walking a line: optimistic, but increasingly sober about the cost.
That’s a hard balance to keep—especially with tech feeling the weight first.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
