Today’s Midday Market Update: Markets Waver Amid Deficit Concerns and Tax Bill Passage

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Major Indexes Show Mixed Performance After Wednesday’s Selloff

As of midday Thursday, May 22, 2025, major U.S. stock indexes are showing mixed performance following Wednesday’s steep declines. The Dow Jones Industrial Average is down 0.2%, while the S&P 500 has slipped 0.1%. The tech-heavy Nasdaq Composite is showing some resilience, up 0.5% in midday trading.

Yesterday’s session saw a significant selloff with the Dow plummeting 1.9% (816.80 points) to close at 41,860.44, the S&P 500 tumbling 1.6% to 5,844.61, and the Nasdaq Composite sliding 1.4% to 18,872.64. This decline pushed major indexes back into negative territory for 2025, as investors reacted to mounting concerns about the federal deficit.

Tax Bill Passage Heightens Deficit Worries

The House of Representatives narrowly passed President Donald Trump’s tax bill this morning in a vote of 215-214. The legislation, which includes tax cuts and increases the SALT deduction cap to $40,000, now heads to the Senate where it faces a complicated path forward.

Market participants remain concerned that the proposed tax cuts will further worsen the U.S. fiscal deficit. The Congressional Budget Office estimates the bill’s price tag at nearly $4 trillion, adding to the already substantial $36.2 trillion federal deficit. These concerns have contributed to a spike in Treasury yields, with the 30-year Treasury bond yield reaching 5.09% on Wednesday—its highest level since October 2023—while the benchmark 10-year Treasury note yield climbed to 4.59%.

Earnings Reports Driving Individual Stock Movements

Several major companies reported earnings before the market opened today. Analog Devices (ADI) was expected to report earnings per share of $1.69, representing a 20.71% increase compared to the same quarter last year. Williams-Sonoma (WSM) and BJ’s Wholesale Club (BJ) were also among the notable companies reporting today.

Technology giants continue to influence market movements, with Microsoft (MSFT) and Apple (AAPL) having fallen 1.2% and 2.3% respectively in yesterday’s session.

Breaking News: OpenAI announced the acquisition of Jony Ive’s AI devices startup io in a $6.4 billion all-equity deal. The former Apple chief design officer will advise OpenAI on the design of new hardware products. This news sent Apple shares down 2.3% on Wednesday.

In other corporate news, Nike will resume selling its products directly to Amazon in the U.S. for the first time since 2019. The sportswear brand also plans to raise prices on a wide range of products by $2 to $10 this week, though items priced under $100 will not be affected.

Upcoming Market Events to Watch

Investors should keep an eye on several upcoming economic data releases. Tomorrow will see the release of NAR Existing Home Sales and New Residential Sales data. Next week brings important reports including Advance Durable Goods on Tuesday, May 27, and the second release of Gross Domestic Product data on Thursday, May 29.

The Federal Reserve’s next policy meeting is scheduled for June 17-18, which will be accompanied by a Summary of Economic Projections. At their most recent meeting on May 6-7, the Fed held interest rates steady at the 4.25% to 4.5% range, noting that the economy continues to expand at a moderate rate despite some recent trade data anomalies.

Market Outlook

The fear-gauge CBOE Volatility Index (VIX) has eased slightly today but remains elevated at around 20.46, down 1.96% from yesterday’s close. Trading volume remains robust, with yesterday seeing 19.39 billion shares traded.

As we move through the remainder of the trading day, investors will continue to monitor developments related to the tax bill, Treasury yields, and any additional corporate earnings announcements that could impact market sentiment.