Wall Street temporarily stabilizes after sell-off; Trump tax bill, PMI data draw attention
US stock futures were trading flat on Thursday morning as investors took a breather from yesterday's massive sell-off, as concerns over the government's debt and the Trump administration's fiscal policies continued to mount.
Dow Jones futures were down 42 points, or 0.1%, at 05:55 ET (09:55 GMT), while S&P 500 Futures were up 6 points (+0.1%) and Nasdaq 100 Futures were up 50 points (+0.2%).
Dow Jones plunges, debt concerns mount
Wednesday's trading session saw the Dow Jones lose more than 800 points, pressured by soaring US government bond yields, amid concerns that the Trump administration's tax cut package could exacerbate the already $36.2 trillion national debt.
Pressure on yields increased after the auction of $16 billion worth of 20-year Treasury bonds showed weak demand from investors. Bond yields and prices move in opposite directions, sending both bond and stock markets reeling.
Trump's tax bill clears House by slim margin
President Trump's tax and spending reform bill passed the House of Representatives by a margin of 215-214 early Thursday morning after days of internal disagreements within the Republican Party.
The bill includes an extension of the 2017 tax cuts, additional tax breaks for tips and auto loans, and increased spending on defense and border security. But it would cut many social programs such as food and health care for low-income earners, drawing criticism from Democrats.
Independent analysts warn the bill could add $3 trillion to $5 trillion to the national debt burden in the coming years.
Next in focus: May PMI
The latest economic data could provide further clues about the health of the U.S. economy amid persistent inflation and volatile trade.
Investors are closely watching S&P Global's May preliminary PMI:
The manufacturing PMI is expected to fall to 49.9, below the 50 threshold that indicates contraction.
Services PMI expected to edge up to 51.0, suggesting weak recovery.
The composite PMI last month came in at 50.6, reflecting a slowdown in business activity.
Snowflake Breaks Out; Urban Outfitters Surprises
In corporate stocks, Snowflake (NYSE: SNOW) jumped after the company raised its FY26 product revenue forecast, pointing to growing demand for its AI and data analytics services.
Meanwhile, Urban Outfitters (NASDAQ: URBN) also surged ahead of the open after reporting better-than-expected quarterly earnings – its second straight quarter of strong revenue growth and third straight quarter of EPS growth.
Oil Prices Continue to Fall on OPEC+ Production Hike Hopes
Crude oil fell sharply on Thursday, following reports that OPEC+ is discussing a possible production hike at its June 1 meeting.
Brent fell 1.4% to $63.99 a barrel
WTI fell by the same amount to $60.69 a barrel
Bloomberg quoted delegates as saying OPEC+ is considering raising output by 411,000 barrels a day in July, as the market faces the risk of a new supply glut.
Summary: The path is still unclear
With uncertainties over debt, fiscal policy, PMIs and energy prices, the US market continues to be caught between recovery hopes and recession fears. Investors should closely monitor developments in the Senate regarding the tax bill, as well as new economic signals that will shape expectations for interest rates, growth and stock valuations in the second half of the year.