Wall Street goes back from the top. S&P

After six subsequent upward sessions, the S & P500 index scored a moderate decline, withdrawing from the highest levels from the beginning of March. The game had high profitability of American debt, which was a derivative of tax reduction proposals by the Trump team.

The S & P500 index ended in Tuesday trade at 5,940.46 points, lowering by 0.39%. It was the first inheritance session from May 9 – so for over a week. However, if you miss that cosmetic observation (by 0.07%), then he really recorded the last day under the S & P500 line on May 6, so two weeks ago.

Generally, after the April customs roller coaster, American stock exchanges grow like yeast and like a string. The variability has significantly decreased and we have not seen a real session for nearly a month. Thanks to this, I S & P500 and Nasdaq returned to levels from the beginning of March. As if President Trump's global customs were not at all.

Now the White House host has decided to transfer his strength to the tax front. The Capitol has been sent to extend tax breaks from the time of the first term of Donald Trump from 2017. Investors are afraid, however, that such a move will worsen the very poor condition of public finances of the United States, which was manifested by even the Friday reduction in the US credit rating at the Moody's agency. In this way, America for the first time in history lost the highest assessment of creditworthiness in all major rating agencies.

Light anxiety can also be seen on the debt market. The profitability (YTM) of 10-year Tresuries persists near 4.5%. Yes, it is significantly less than in January (over 4.8%) or in autumn 2023 (5%), but since then the long -term inflation expectations of investors have decreased significantly. Therefore, such high profitability indicates the deterioration of the US government's creditworthiness. The confirmation of this hypothesis seems to be the fact that the profitability of 30-year-old US bonds again arrived around 5% and was the highest since November 2023.

Let us just remind you that the United States public debt has been exceeding 120% of GDP for several years, and the fiscal deficits persist at the level of 6% of GDP per year (after a period of gargantuic deficits of 12-15% of GDP in Covid 2020-21). For the last time, the balanced budget of the US administration reached a quarter of a century ago.

KK

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