Dow closes over 800 points lower amid soaring yields, tax-cut uncertainty

4:15pm: Rising yields and fiscal fears rattle Wall Street

US stocks took a sharp turn lower on Wednesday, with all major indexes closing deep in the red as rising Treasury yields and renewed fiscal jitters spooked investors.

The Dow Jones plunged 817 points, or 1.9%, to end at 41,860, while the S&P 500 slid 1.6% to 5,845. The tech-heavy Nasdaq fell 270 points, or 1.4%, to 18,873, and small caps got hit the hardest, with the Russell 2000 dropping 2.6% to 2,051.

The market’s stumble followed a spike in the 10-year Treasury yield to 4.55%, its highest since February, driven by concerns over Washington’s heated debate on President Trump’s proposed tax cuts. Investors are worried the plan—already facing pushback within the GOP—could inflate the federal deficit and deepen long-term debt risks. That unease was magnified by Moody’s recent downgrade of the US credit rating.

Adding to the sour mood, Target slumped over 5% after reporting a drop in sales and warning about the impact of tariffs on consumer spending.

With no major economic reports due this week, all eyes will stay on Capitol Hill and the bond market. Traders are also gearing up for key earnings next week, including results from Nvidia, which could provide a much-needed sentiment boost—assuming rates don’t steal the spotlight again.

3:50pm: Proactive news headlines

Graphene Manufacturing Group Ltd (GMG) approved A$900,000 in funding to begin early-stage development of its Gen 2.0 graphene production facility in Queensland, Australia.

M2i Global (MTWO) appointed former White House cybersecurity expert Camilo Sandoval as senior advisor to support its executive team and board.

U.S. Global Investors (GROW) announced that its gold-focused ETF, GOAU, has begun trading on Colombia’s stock exchange, expanding its presence in Latin America.

BioHarvest Sciences Inc. (BHST) signed a contract to develop a plant-based fragrance compound using its Botanical Synthesis technology, marking its entry into the fragrance industry.

Midnight Sun Mining Corp (MMA) reported solid progress on its phase one 2025 exploration program at Zambia's Solwezi project, with geophysics, drilling, and sampling underway across key targets.

Delivra Health Brands Inc. (DHB) posted positive adjusted EBITDA of $124,000 in its fiscal third quarter, driven by strong marketing of its Dream Water and LivRelief products.

3:10pm: Stocks on the move

Alphabet Inc (GOOG) is ramping up its AI efforts with the nationwide launch of "AI Mode" in Google Search and new smart glasses, signaling a strategic shift toward AI monetization through its Gemini platform.

Wolfspeed Inc (WOLF) shares plummeted nearly 70% after reports emerged that the company is preparing a Chapter 11 bankruptcy filing amid a $6.5 billion debt load and failed restructuring talks.

Kraft Heinz Co (KHC) is exploring strategic options to enhance shareholder value following Berkshire Hathaway's exit from its board.

UnitedHealth Group Inc (UNH) saw its shares drop over 4% after allegations surfaced that it secretly incentivized nursing homes to reduce hospital transfers, potentially compromising patient care to cut costs.

Xpeng Inc (XPEV) posted record first-quarter deliveries and significantly narrowed losses, sending its stock up nearly 12%.

Canada Goose Holdings Inc (GOOS) surged almost 30% after beating revenue expectations in its fiscal fourth quarter.

Graphene Manufacturing Group Ltd (GMG) approved an initial A$900,000 investment to kick off development of its next-generation graphene production facility in Queensland.

M2i Global (MTWO) appointed former White House cybersecurity official Camilo Sandoval as senior advisor to bolster its executive and board leadership.

TJX Companies Inc (TJX) reported stronger-than-expected first-quarter results and reaffirmed its full-year guidance amid global economic uncertainty.

Target Corp (TGT) cut its full-year sales forecast after a disappointing first quarter, pushing shares lower.

2:16pm: Wednesday's headlines

Target Corp slashed its full-year guidance following a weak first quarter.

UnitedHealth shares fell following a report by The Guardian which alleged the company secretly paid nursing homes substantial bonuses to reduce hospital transfers of sick residents.

Kraft Heinz Co (NASDAQ:KHC, ETR:KHNZ) plans to evaluate potential strategic transactions aimed at unlocking shareholder value, following Berkshire Hathaway’s decision to relinquish its board seats at the packaged foods company.

Ford Motor Company (NYSE:F) is allowing Nissan to use part of its battery manufacturing facility in Kentucky amid a slowdown in electric vehicle demand, according to a Wall Street Journal (WSJ) report.

1:13pm: Alphabet-fueled tech rally

Alphabet is accelerating its AI strategy with the full US rollout of “AI Mode” in Google Search and the reveal of Android XR smart glasses.

The announcements at Google I/O highlight growing Gemini capabilities, with new tools like coding agent Jules and Deep Think mode.

AI Overviews have driven a 10% lift in search queries, supporting broader rollout.

Bank of America sees Google moving from AI catch-up to offense, calling its AI assets underappreciated and positioning it to compete directly with OpenAI.

Alphabet shares are up nearly 4.3% on Wednesday afternoon.

12:40pm: Stocks mixed as tech climbs

It’s a mixed bag on Wall Street this Wednesday afternoon as investors sort through a fresh batch of earnings, rising bond yields, and a few global trade worries creeping back into the picture.

The Dow Jones is under pressure, down about 0.7%, weighed by a slide in UnitedHealth Group following a negative report on its business practices. The S&P 500 is also slightly lower, slipping 0.1%, while the Nasdaq is in the green, up 0.4%, thanks to a solid rebound in tech.

The day started off on a shaky note, with markets pulling back after recent gains. Renewed concerns about U.S. trade policy and the global economic outlook have investors on edge again.

In the bond market, the 30-year Treasury yield has climbed back above 5%, adding fuel to the anxiety. The move higher reflects growing concern that new tax legislation could further expand the already hefty federal deficit.

11:27am: Is market resilience waning?

Market resilience may be waning amid budget and spending concerns, warns IG chief market analyst Chris Beauchamp.

Beauchamp cautioned that while it’s premature to declare an end to the market’s rally since April, investors face mounting challenges, pointing to growing unease over the US budget.

“The US budget continues to dominate newsflow, but it takes place in a market atmosphere that’s now much less forgiving of Washington’s propensity to spend, spend, spend without regard for the consequences,” he commented.

Beauchamp also flagged broader economic concerns, noting Target’s lowered annual forecast as a sign of weakening consumer demand. “Stocks have shown a remarkable ability to recover from bad news,” he said, “but investors cannot take it for granted right now.”

10:45am: Retail traders power rally

The recent surge in US stocks is impressive for defying a deteriorating earnings landscape, says Kathleen Brooks, research director at XTB.

“The rally is remarkable because it has defied lower earnings and sales growth compared to recent quarters,” Brooks said.

She noted that the market strength comes even as analysts warn of potential earnings downgrades and corporate executives cite recession fears and economic uncertainty as key risks in their outlooks.

"This suggests that buying power is strong in the market, most likely driven by retail traders who were an important stabilizing mechanism during the sell off in stocks in April," Brooks added. "If retail traders stick with stocks, especially US stocks, then equities could continue to recover."

9.55am: Dow Jones and S&P drop as risk sentiment dented

US stocks have joined global stock markets in the red on Wednesday as rising bond yields dented risk sentiment. 

Leading the decline on Wall Street was the Dow Jones, down 0.7% as UnitedHealth, Amazon and Nike all fell.

The broader S&P 500 dropped 0.4%, the tech-heavy Nasdaq dipped 0.3%, and the small cap Russell 2000 slid 1%. 

Notable fallers include retailer Target, down 6% after it downgraded its outlook for the full year as quarterly earnings missed expectations. 

8am: Dow Jones tipped to fall as Wall Street extends losses 

Wall Street stocks are set to extend losses on Wednesday as rising geopolitical tensions and worries about the US economy.   

Dow Jones futures were down 0.8%, and those for the S&P 500 and Nasdaq were both almost 0.6% lower. 

All three indexes finished lower the day before, with the S&P and Nasdaq falling 0.4% and the Dow dropping 0.3%, while the Russell 2000 was flat. 

The US dollar was down, with the DXY dollar index 0.5% lower at 99.6, while bond yields were a few basis points higher on both sides of the Atlantic. 

Reports citing US officials that Israel is making preparations to potentially strike Iranian nuclear facilities causing both gold and oil prices to surge, though oil prices retreated 0.6%. Gold is up 0.6% at $3,309 an ounce. 

Markets are "braced for volatility", said market analyst Kenny Polcari at Slatestone, with bonds coming under pressure "as investors focus on the ongoing deficit spending" in the US. 

Higher bond yields tells us "that investors are demanding higher yields on the money they lend to the government and at some point those higher yields will present a problem for stocks," he said.

Stocks, bonds and gold were also taking into consideration cautious comments by JPMorgan CEO Jamie Dimon.

At JPMorgan’s investor day yesterday, Dimon reiterated his concerns about persistent inflationary pressures and the potential for stagflation in the US economy, saying the risk for stagnant economic growth, high unemployment and persistent inflation is higher than many anticipate.

He expressed skepticism about central banks' ability to manage these challenges, saying, "You all think they can manage all this. I don’t."

"His concerns are and have been well known – but again – comments like that, from a CEO like him, at a time like this only add to the level of angst – and we know what happens when the level of angst builds, some investors, traders and algo’s tend to ‘shoot first and ask questions later’," said Polcari.

Elsewhere, retailer Target Corp (NYSE:TGT) cut its outlook as first quarter net sales came in lower than expected.

It now sees sales facing a low-single-digit decline, compared to the consensus estimate for a small rise, with adjusted earnings per share now guided to a range of $7 to $9.

Nvidia boss Jensen Huang has said that US export controls on artificial intelligence chips have backfired, encouraging Chinese companies to speed up development.

And Elon Musk dismissed concerns about Tesla's recent sales dip and his own leadership during a combative appearance at the Qatar Economic Forum, saying Europe was the company’s “weakest market” but insisting performance elsewhere had already rebounded.