Trump Tax Bill Raises Fiscal Red Flags

All eyes are now on a pending House vote on President Donald Trump's tax proposal. Investors are uneasy: the legislation is expected to swell the federal debt by $3.8 trillion, pushing the total burden closer to $40 trillion.

Europe Opens Lower Amid Global Anxiety

European futures stumbled at the opening bell, taking a cue from a tense session across Asian markets. Investors are bracing for the release of key business activity surveys for May — crucial data that may reveal how European firms are managing in an era of economic ambiguity.

Economic Visibility Fades: Trade Dependence in Focus

These upcoming activity reports are expected to provide insight into how deeply European businesses are being impacted by fading demand and trade-related turbulence. With much of the continent's economy tethered to global exports, the uncertainty looms large.

US No Longer a Safe Haven?

Investors are increasingly diverting attention away from the U.S., wary of a potential global downturn spurred by erratic trade policy — particularly echoes of Trump-era tariffs. This sentiment crystallized Wednesday when a $16 billion auction of 20-year Treasury bonds met with lackluster demand.

Treasury Yields Surge Amid Weak Appetite

As investors turned away from U.S. bonds, yields on long-dated Treasuries surged. The 30-year yield settled above 5%, maintaining levels not seen in over 18 months. Market watchers view this as a clear sign of mounting investor unease.

Japanese Bonds Under Fire: Yields Near Record High

In Japan, the bond market faced intense selling pressure. The 30-year Japanese Government Bond (JGB) yield hit 3.155%, just shy of its all-time high of 3.185%, logged in the previous session. The aggressive sell-off highlights a broader shift in risk appetite.

Asia Closes in the Red: Yen Strength Hurts Nikkei

Asian equities suffered losses across the board. The MSCI Asia-Pacific ex-Japan index dropped 0.6%, while Japan's Nikkei 225 declined 0.8%, weighed down by a strengthening yen — a headwind for the country's exporters.