By Caroline Valetkevitch, Lawrence White
NEW YORK/LONDON (Reuters) -Stock indexes were mixed while Treasury yields edged higher and the dollar fell on Wednesday as concerns continued about U.S. President Donald Trump’s efforts to push through a tax-cutting bill.
The S&P 500 was down slightly while the Nasdaq edged higher along with technology stocks.
Oil prices eased after the U.S. government released bearish data on crude and fuel supplies. Prices had risen more than 1% earlier after CNN reported that Israel was preparing a strike on Iranian nuclear facilities.
Bitcoin, meanwhile, hit a record high, eclipsing its previous high from January.
Investor sentiment has been fragile since Moody’s late last Friday downgraded the United States’ credit rating, stoking concerns about the country’s $36 trillion debt pile, with Trump pushing for tax cuts that could worsen the debt load by $3 trillion to $5 trillion.
Trump tried to get more support from Republicans who object to parts of his tax cut and spending bill. U.S. House of Representatives Speaker Mike Johnson acknowledged a vote by the full chamber may not occur on Wednesday as his Republicans remain divided over the details of the sweeping legislation.
There are also concerns about a lack of progress on U.S. trade talks with trading partners pressing Washington to ease or eliminate its tariffs.
“There’s no doubt the (U.S.) deficit has grown larger,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “Is there a chance that Trump over his term will bring that down? I would be surprised.”
“What we’re really in is this period that’s sort of a waiting game on tariffs,” he added. “Negotiations are going on … we don’t really know if progress is being made.”
The Dow Jones Industrial Average fell 350.95 points, or 0.83%, to 42,324.49, the S&P 500 fell 12.54 points, or 0.21%, to 5,927.87 and the Nasdaq Composite rose 61.70 points, or 0.32%, to 19,203.85.
MSCI’s gauge of stocks across the globe rose 0.64 points, or 0.07%, to 882.26.
European stocks eased, led by falls in British sportswear retailer JD Sports and Swiss bank Julius Baer.
The pan-European STOXX 600 index was down 0.04%.
The price of bitcoin rose to its highest level on record on Wednesday. It was last up 1.56% at $108,617.90. Ethereum rose 1.62% to $2,555.01.
Treasury yields have stayed elevated, with the yield on 30-year Treasury bonds hitting 5%, ahead of a key auction later on Wednesday of $16 billion of 20-year notes which will act as a measure of demand for longer-term U.S. debt.
The 30-year bond yield was up 4.2 basis points at 5.009%.
The U.S. dollar fell for a third day against a range of currencies, with investors flocking to safe-haven currencies including the yen and Swiss franc. Against the Japanese yen, the dollar weakened 0.55% to 143.7. Against the Swiss franc, the dollar was down 0.36% at 0.825.
The pound touched a three-week high and was up 0.33% at $1.3437. British inflation jumped to a higher-than-expected annual rate of 3.5% in April from 2.6% in March.
JAPANESE BOND JITTERS
Markets were also monitoring the Group of Seven finance ministers’ meetings currently under way in Canada for any hints that a weaker dollar could help advance trade negotiations.
Investors in the Japanese bond market remained jittery after a steep selloff in super-long bonds in the previous session.
Yields on longer-dated bonds hovered near record highs on Wednesday, with questions over how the country could fund new fiscal stimulus, with the central bank trying to normalize monetary policy.
Data on Wednesday showed Japanese shipments to the U.S. fell in April even as exports rose for the seventh straight month, highlighting the toll Trump’s tariffs could take on the fragile economic recovery in Japan.
(Reporting by Caroline Valetkevitch in New York and Lawrence White in London; additional reporting by Johann M Cherian and Ankur Banerjee in Singapore; Editing by Sharon Singleton, Ed Osmond and Matthew Lewis)
