NEW YORK, May 22 (Xinhua) -- U.S. stocks finished little changed on Thursday, as investors digested the House of Representatives's narrow passage of U.S. President Donald Trump's sweeping tax legislation and its potential impact on the nation's growing debt.
The Dow Jones Industrial Average fell by 1.35 points, or 0.00 percent, to 41,859.09. The S&P 500 sank 2.60 points, or 0.04 percent, to 5,842.01. The Nasdaq Composite Index increased by 53.09 points, or 0.28 percent, to 18,925.74.
Eight of the 11 primary S&P 500 sectors ended in red, with utilities and health leading the laggards by losing 1.41 percent and 0.76 percent, respectively. Meanwhile, consumer discretionary and communication services led the gainers by going up 0.56 percent and 0.32 percent, respectively.
The bill -- referred to by Trump as a "big, beautiful bill" -- is projected by the nonpartisan Congressional Budget Office to add approximately 3.8 trillion U.S. dollars to the current 36.2 trillion dollars of national debt over the next ten years if enacted.
"It seems pretty clear that, in its present form, the legislation is certainly not going to improve the budget deficit and could make it substantially worse," said Steve Sosnick, chief market analyst at Interactive Brokers.
Bond markets, which have been in sharp focus following Moody's recent U.S. credit downgrade, saw some relief. After several days of climbing, longer-term U.S. Treasury yields retreated slightly. The 30-year yield slipped just below 5.1 percent, pulling back from levels last seen during the financial crisis, while the 10-year benchmark yield dropped to around 4.55 percent.
Federal Reserve Governor Christopher Waller suggested in an interview with Fox Business that rate cuts could be considered if Trump's tariff policies end up being less severe than feared. "If we can get the tariffs down close to the 10 percent and then that's all sealed, done and delivered somewhere by July, then we're in good shape for the second half of the year, and then we're in a good position to kind of move with rate cuts through the second half of the year," Waller said.
On the economic front, U.S. output rebounded in May as businesses adjusted to the recent tariff rollback. According to S&P Global, the flash composite Purchasing Managers' Index -- which measures activity across both the manufacturing and services sectors -- rose to 52.1 in May, up from 50.6 in April, indicating a modest expansion.
However, labor market data pointed to some softness. The weekly jobless claims report showed that 1.9 million Americans were continuing to receive unemployment benefits. The four-week moving average of continuing claims hit its highest level since November 2021, suggesting increased strain in the job market.
Market expectations, based on data from LSEG, now reflect the likelihood of at least two 25-basis-point interest rate cuts by the end of the year, as investors continue to monitor economic momentum and fiscal developments. ■
