S&P 500 concluded Thursday with minimal fluctuations as investors express concerns regarding elevated yields impacting the economy. The S&P 500 concluded Thursday with little change, as investors contended with concerns over increasing interest rates and anxieties regarding a growing U.S. deficit. The 30-year Treasury yield reached its peak since October 2023 following the passage of a bill that has raised concerns among investors regarding a potential exacerbation of the U.S. deficit. The Dow Jones Industrial Average experienced a minor decline of 1.35 points, concluding the trading session at 41,859.09. The S&P 500 experienced a decline of 0.04%, concluding at 5,842.01, whereas the Nasdaq Composite saw an increase of 0.28%, finishing at 18,925.73.

In a party line vote early Thursday, House members endorsed the bill that encompasses reduced taxes and increased military expenditure. The measure — which now goes to the Senate — has the potential to increase the U.S. government’s debt by trillions and elevate the deficit at a moment when concerns about a resurgence in inflation, exacerbated by Trump tariffs, are already impacting bond prices and driving yields higher. The Congressional Budget Office estimates the cost of the bill at almost $4 trillion.

“In the short term, the tax bill is beneficial for the economy.” It is poised to enhance GDP growth in 2026. “It reduces taxes for lots of people, it increases spending, especially on defense, and so those things are stimulative to the economy and are going to boost GDP growth,” said Jed Ellerbroek, portfolio manager at Argent Capital Management, in an interview with CNBC. However, he observed that in the longer term, the measure contributes to the deficit and it’s unfavorable for the market. “Yields are going higher, which means prices are going down because Treasurys are becoming incrementally less appealing and trustworthy, as our budget deficit stays extremely high for a very long period of time with no signs of it going back to normal,” Ellerbroek added.

The 30-year Treasury bond yield on Thursday reached heights not observed since 2023, peaking at 5.161%, before pulling back later in the session. The benchmark 10-year Treasury note yield retreated from its peak for the day. The rise in long-term rates, serving as benchmarks for consumer loans, may exert pressure on an economy that is already grappling with the implications of Trump’s recently imposed universal tariffs. The lackluster auction of 20-year Treasury debt contributed to the surge in yields and the decline in stock prices on Wednesday. The passage of this bill in the Senate may negatively impact investors’ appetite for Treasurys.