US: Stocks mixed as Trump tax bill advances, Tesla falls
[NEW YORK] Wall Street stocks finished mixed on Tuesday after the Senate approved Donald Trump’s sweeping legislation to extend tax cuts and enact deep reductions in social spending.
The Republican-led upper congressional chamber narrowly cleared Trump’s mammoth domestic policy bill, sending the measure back to the House of Representatives, where the vote is also expected to be close.
Equity market viewers have cheered the prospects of extending tax cuts while expressing misgivings about projections that the measure will add some US$3 trillion to the US national debt.
The Dow Jones Industrial Average rose 0.9 per cent to 44,494.94.
But the broad-based S&P 500 dipped 0.1 per cent to 6,198.01, while the tech-rich Nasdaq Composite Index dropped 0.8 per cent to 20,202.89. Both the S&P 500 and Nasdaq closed at records on Monday.
Data released on Tuesday showed US manufacturing activity shrank in June for a fourth straight month, though by a slower rate than the prior month.
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The report comes ahead of key US data later in the week, including the closely watched monthly jobs report.
Among individual companies, Tesla fell 5.3 per cent as the electric car company’s CEO Elon Musk sparred with Trump over the tax and spending bill.
After Musk lambasted the legislation as wasteful and misguided, Trump warned of retribution against Tesla and other Musk ventures.
“This high-profile feud introduces political risk,” Briefing.com said of the tiff.
“The personal nature of the conflict, amplified by Trump’s comments implying Tesla’s reliance on subsidies for survival, has sparked fears of broader policy shifts targeting Musk’s business empire. This political uncertainty undermines investor confidence.”
Meanwhile, rival automakers General Motors and Ford jumped 5.7 per cent and 4.6 per cent, respectively, after reporting higher second-quarter US auto sales, as consumers accelerated purchases to get ahead of US tariffs. AFP
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