U.S. Stocks and Treasury Yields Gain
Global shares climbed on Wednesday after House Republicans advanced U.S. President Donald Trump’s tax cut plans, bolstering the dollar and helping Treasury yields recover some losses.
The Republican-controlled U.S. House of Representatives narrowly passed Trump’s $4.5 trillion tax-cut plan on Tuesday, sending it to the Senate, where Republicans are expected to consider it next.
“It’s mainly good for corporate U.S.,” said Lars Skovgaard, senior investment strategist at Danske Bank. “There’s expected to be less regulation and tax cuts. If this goes through, it will be positive for markets.”
U.S.-Ukraine Minerals Deal Boosts Sentiment
Investor sentiment also improved following reports that the U.S. and Ukraine had agreed on draft terms for a minerals deal.
U.S. stock futures rebounded after a mixed Wall Street session, with Nasdaq futures rising 0.8% and S&P 500 futures gaining 0.5%.
“The plan moved through just a little bit quicker than people were expecting,” said Tony Sycamore, a market analyst at IG.
Treasury Yields and Rate Cut Expectations
U.S. Treasury yields rose slightly as investors anticipated more debt issuance ahead. The benchmark 10-year yield increased 1.5 basis points to 4.311%, while the two-year yield, which reflects changes in Federal Reserve rate expectations, climbed about 2 basis points to 4.112%.
Yields had declined to multi-month lows on Tuesday amid growing bets on Fed rate cuts. Weak U.S. consumer confidence data—falling at its sharpest pace in 3.5 years—added to concerns over the economic outlook. Fed funds futures now indicate 55 basis points of rate cuts by year-end, implying at least two quarter-point reductions, up from 40 basis points last week.
Copper Prices Surge on Tariff Probe
U.S. copper prices surged over 4% after Trump ordered an investigation into potential new tariffs on copper imports.
Currency and Commodity Markets
The dollar regained ground after hitting its lowest level since December 10 earlier this week. The dollar index rose 0.2%, while the dollar strengthened 0.2% against the yen to 149.27, driven by rebounding U.S. Treasury yields.
The euro eased 0.1% to $1.0499 but remained near a one-month high. Meanwhile, the British pound traded close to a two-month peak at $1.2656.
In commodities, Brent crude futures rose 0.3% to $73.22 per barrel after falling over 2% in the previous session. U.S. West Texas Intermediate (WTI) crude climbed 0.4% to $69.19 per barrel, partially recovering from Tuesday’s 2.5% slump. Gold remained steady at $2,915 per ounce.
Nvidia Earnings in Focus
Artificial intelligence giant Nvidia (NVDA.O) is set to report quarterly earnings later on Wednesday, which could provide insight into AI demand and justify high valuations in the sector.
Investor skepticism has grown over the billions U.S. tech firms have invested in AI infrastructure, especially as China’s DeepSeek continues to make breakthroughs.
“Any signs of weakness in Nvidia’s report could have outsized effects on investor sentiment towards AI stocks as a whole,” said Saxo’s global head of investment strategy Jacob Falkencrone. “This earnings report isn’t just about Nvidia … it’s about whether the AI revolution can maintain its breakneck pace.”
Conclusion
With markets rallying on tax cut hopes, upcoming Nvidia earnings, and Fed rate cut expectations, investors remain focused on economic data and policy developments. The coming weeks will be crucial in determining whether these gains can be sustained amid evolving global market dynamics.
