Dow closes down 800 points as bond sell-off rattles markets
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(NEW YORK) — Stocks closed down significantly on Wednesday as bond yields spiked amid deficit concerns centered on a tax cut measure under consideration in the U.S. House as part of a megabill supporting President Donald Trump’s second-term agenda.
The Dow Jones Industrial Average closed down 817 points, or 1.9%, while the S&P 500 declined 1.6%. The tech-heavy Nasdaq dropped 1.4%.
The sell-off on Wall Street coincided with a surge in bond yields, which in turn raised the cost of U.S. borrowing and stoked investor fears about the wider impact across the economy.
The 10-year Treasury yield jumped from 4.48% to 4.58%, reaching its highest level since February.
The nonpartisan Congressional Budget Office on Tuesday found the tax policies backed by Trump would add $3.8 trillion to the national debt.
The bond sell-off arrives at a moment of heightened volatility in Treasury markets. Long-term bond yields soared last month in the immediate aftermath of Trump’s “Liberation Day” tariffs.
A U.S. credit downgrade at Moody’s last week further roiled debt markets.
Bond yields rise as bond prices fall. When a sell-off hits and demand for bonds dries up, it sends bond prices lower. In turn, bond yields move higher.
The yield for long-term Treasury bonds helps set interest rates for a host of consumer loans, including mortgages and credit cards.
When interest rates rise, businesses also face higher borrowing costs, making it less likely that firms would move forward with an office expansion or round of hiring, analysts previously told ABC News. In turn, such conditions risk an economic slowdown.
(NEW YORK) — Stocks slumped at the open of trading on Monday after a downgrade of U.S. credit triggered a spike in debt yields that threatened to raise borrowing costs throughout the nation’s economy.
The Dow Jones Industrial Average dropped 295 points, or 0.7%, while the S&P 500 fell 0.9%. The tech-heavy Nasdaq plunged 1.2%.
Moody’s, a top ratings agency, cut the U.S. credit rating on Friday, dropping it one notch from the top rating of Aaa to a lower classification of Aa1.
The credit downgrade unleashed a selloff of U.S. debt, sending Treasury yields higher, which in turn raised the cost of U.S. borrowing and stoked investor fears about wider impact across the economy.
“This is a major symbolic move as Moody’s were the last of the major rating agencies to have the U.S. at the top rating,” a Deutsche Bank analyst said in a client note shared with ABC News.
The Treasury selloff sent long-term yields soaring above the level attained in the immediate aftermath of President Donald Trump’s “Liberation Day” tariffs. That spike in yields helped persuade Trump to suspend a major swathe of the tariffs, Trump later said.
The current spike in debt yields coincides with U.S. House Republicans’ push to pass a domestic policy bill that includes broad tax cuts. The nonpartisan Congressional Budget Office warned last month that the bill would raise the nation’s debt, which now stands at about $36 trillion.
Buying a Tesla has become a bit more complicated in the past year.
The company’s Model Y and Model 3 continue to be the best-selling electric vehicles in the U.S., accounting for more than 40% of all EVs sold last year, according to Cox Automotive data. But Tesla’s stronghold on the EV market is slipping.
The U.S. electric automaker has seen its popularity dip in recent months, with insiders attributing the decline to more competition and Elon Musk’s political views.
Reports of Tesla owners selling their vehicles, violent demonstrations at Tesla showrooms and anti-Musk rallies across the globe have convinced some consumers to search for an alternative. The good news is that legacy automakers and electric startups are quickly answering that demand, unveiling new models that offer performance, styling and impressive range.
If you’re searching for an EV, here are some suggestions that could meet your driving needs.
Model 3
Jason Cammisa, host of Hagerty’s “ICON” series, said motorists have “legitimate” concerns about Tesla: “Buying one is making a political statement,” he told ABC News. But the Model 3 is also “the best consumer product in the world,” he argued.
“It’s the best car in the world, period, full stop, not up for discussion,” he said. “You won’t find a better car on planet earth, not at that price and combination of attributes.”
He added, “The thing about Tesla is that is spans so many different price points and socioeconomic situations … you have value shoppers looking at Model 3s as well as billionaires.”
Cammisa, however, has plenty of praise for several Model 3 competitors, including the Hyundai Ioniq 5 ($42,400), the Kia EV6 ($42,900) and Genesis GV60 ($52,350).
“The Hyundai products tend to hit all the marks well — the packaging is good and the UX (user experience) works well enough,” he noted. “The Ioniq 5 N is the enthusiast choice — it has drift modes and you get Lamborghini levels of performance in that car.”
Cammisa said he reviews and ranks EVs on factors that may not have been top priorities for motorists in the past.
“The biggest differentiators in the market now are not things like powertrains and suspension tuning. The consumer experience is the real differentiator now,” he said.
Patrick George, editor-in-chief of InsideEVs, said he’s heard from many Tesla owners who are ready “to move on” from their cars.
“They’re done with Tesla because of Elon,” he told ABC News. “Getting rid of Teslas are a real thing.”
He and his staff have compiled a list of non-Teslas to chose from, which includes the EV6 and Ford Mustang Mach-E.
George noted that the BMW i4 and i5 were superb replacements: “I was massively impressed with how those drive,” he said.
Model Y
Jared Rosenholtz, editor at large for CarBuzz, has two favorite Model Y replacements: the Chevy Equinox ($33,600) and Porsche Macan Electric ($77,295).
“The Equinox EV is a fantastic little vehicle with a nice interior and more than 300 miles of range,” he told ABC News. “With incentives, the price will come in under $30,000.”
The pricier Macan EV “drives just as well as the gas version,” according to Rosenholtz, who is also a fan of the Audi Q6 e-tron ($63,800), which is similar in size and power.
Camissa, too, was impressed with the Macan, saying it had “the best stereo I ever heard in a car.”
“The Macan EV is the total package,” he said.
Rosenholtz also recommended the new Volvo EX30 ($46,195), a smallish yet mighty crossover that packs 422 hp and sprints from 0-60 mph in 3.4 seconds.
“The EX30 is super adorable and the quickest Volvo ever made,” he said.
Model S
Cammisa, Rosenholtz and George all agreed that the Lucid Air, a handsome electric sedan that can travel at least 420 miles on a single charge, was without question a top competitor to the S, or any sedan on the market.
“It has unbelievably fast charging and drives amazing,” said Rosenholtz. “And you can get a Lucid for $10,000 less than the cheapest Model S.”
The Air, which is available in four trims, has a starting price of $69,900. Owners can “fill up” their Air with 200 miles of charge in about 12 minutes if they opt for the Wunderbox battery charger, according to the company.
Cammisa raved about the Air Sapphire ($250,000), which is priced like a Bentley and performs like a supercar: 0-60 mph in 1.89 seconds.
“It’s the best-handling sedan ever made in the history of the world,” he said. “The Lucid Gravity is even better — if you want a minivan looking SUV. Dynamically that thing is unbelievable and the packaging is unbelievable. I send people to Lucids all the time.”
In addition to the Lucid Air, George listed the Porsche Taycan ($100,300) and Hyundai Ioniq 6 ($37,850) as two great options, depending on one’s budget.
“The Ioniq 6 is outstanding on range,” he pointed out. “The Taycan is the OG Model S competitor — it’s more like a sports car with really fast charging.”
Model X
Americans love their big, three-row SUVs and plenty of Model X challengers have hit the market in recent months. George said Tesla owners are increasingly turning to startup Rivian, which makes the fashionable R1S ute ($75,900).
“We’ve seen a lot of Model X owners move to Rivian. It’s the closest to Tesla in so many areas — software updates, range and performance,” George said. “Everyone who has gotten a Rivian has so far adored it. It’s one of my favorite trucks.”
Added Cammisa: “The R1S is the EV that Range Rover owners want.”
Cammisa still prefers the Lucid Gravity ($79,900), which is available to order now on the Lucid site.
“It does have the proportions of a minivan but the engineers have crafted the perfect commuter vehicle,” he said. “This thing has everything you need but the question will be: is this what people want?”
George also pointed to the Polestar 3 ($67,500), a sleek and haute SUV that can be configured in all-wheel drive or rear-wheel drive. The 3’s long range dual motor model makes 489 horsepower and 620 lb.-ft. of torque and its dual chamber active air suspension improves the handling and ride quality by adapting to sensor input 500 times a second.
“The Polestar 3 is very Tesla-esque,” said George. “It’s got great tech, outstanding performance and great styling.”
Honda’s Prologue ($47,400), the company’s first electric SUV, has already been a hit with consumers since it launched last year. The interior is spacious, the optional panoramic roof adds brightness to the cabin and designers included high-quality materials and large buttons and knobs. Honda has partnered with General Motors on battery development and technology, so there are many similarities with the Chevy Blazer EV.
“The Prologue is a great gateway to EVs,” said George, who noted how “normal” the Prologue drove compared to more aggressive regenerative braking systems. Plus, “it has buttons if you don’t want a car that’s all screens and minimalist.”
(WASHINGTON) — President Donald Trump announced a trade agreement with Japan on Tuesday, making it the largest U.S. trade partner to broker an accord as the White House threatens to impose tariffs on dozens of countries within days.
Before the deal, Japan faced the prospect of a 25% tariff rate set to take effect Aug. 1. Instead, products from the fifth-largest U.S. trade partner will be slapped with a 15% tariff, in exchange for a willingness on the part of Japan to import some goods, among other concessions.
In a post on social media late Tuesday, Trump touted the agreement as a “massive deal.” The White House has yet to release full details of the agreement.
Japanese Prime Minister Shigeru Ishiba also celebrated the accord. “With the national interests of both countries in mind, we were able to reach an agreement at this time,” Ishiba said.
Japan’s Nikkei index surged 3.5% on Wednesday, while major U.S. indexes nudged slightly higher in early trading.
Here’s what to know about what’s in the trade agreement and what comes next:
What’s in the U.S. trade agreement with Japan? The trade agreement lowers the tariff rate on Japanese products to 15%, putting it below the threatened rate of 25% but higher than a universal rate of 10% faced by nearly all imports.
Even more, the U.S. agreed to set a 15% tariff on Japanese cars, putting it below the 25% tariff rate placed on imported vehicles from other nations.
Japan purchased nearly $80 billion worth of U.S. products in 2024, while the U.S. bought about $148 billion worth of Japanese goods, according to the Office of the U.S. Trade Representative, a government agency.
Cars and auto parts accounted for about $52 billion worth of imported Japanese products, making up more than one-third of products purchased by the U.S., government data shows. Shares of Japan-based Toyota soared more than 13% on Wednesday, while Honda jumped about 12%.
In exchange for the softening of U.S. tariffs, Japan agreed to open its economy to imports of trucks, rice and other agricultural goods, Trump said.
Japan also agreed to invest $550 billion in the U.S. economy, Trump added, but the president did not specify how the funds would be spent.
How many trade agreements has the White House achieved so far? When Trump delayed the onset of so-called “reciprocal tariffs” in April, the White House vowed to strike 90 trade agreements in 90 days. Before that deadline elapsed, Trump proposed a flurry of similar country-specific tariffs with a new effect date of Aug. 1.
So far, Trump has brokered agreements with the United Kingdom, Indonesia, Vietnam, the Philippines and Japan. The White House also reached a preliminary accord with China that lowered tit-for-tat tariffs previously imposed by the world’s two largest economies.
For his part, the president has insisted that the on-again, off-again levies make up a key part of his negotiation strategy.
“The president and his trade team want to cut the best deals for the American people and the American worker,” White House press secretary Karoline Leavitt said last month when she announced the Aug. 1 deadline.
Price hikes could hit coffee, shoes, appliances and a range of other products if additional tariffs take effect on Aug. 1, analysts previously told ABC News.
