Today's Market: Tax Bill Uncertainty Ignites Dow Rally, Sends Nasdaq Tumbling
The Dow Jones Industrial Average edged up about 1%, while the S&P 500 slipped less than 0.5%. The Nasdaq Composite slid about 0.5% from its record high.
Investors are weighing the prospects of a fresh tax package that could roll back individual and corporate rates, which some see as a boon for consumer stocks and small?caps. Uncertainty over the bill's details, such as the duration of rate extensions and offsets for lost revenue, has prompted traders to pare back exposure to high?valuation technology names.
Technology shares led declines, with semiconductors and software companies under pressure. Meanwhile, financials and industrials found modest support, buoyed by expectations of sustained consumer spending if tax relief is approved.
Treasury yields held near recent peaks, reflecting growing confidence in near?term economic strength but also fears of higher deficits. Market participants will focus on upcoming congressional sessions for clues on the bill's final shape.
With fiscal policy negotiations set to intensify, investors may see further volatility as new details emerge.
This article first appeared on GuruFocus.
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