Market Wrap | Senate Republicans Propose Tax Cuts and Debt Ceiling Hike Amid Market Surge

On April 2, 2025, the U.S. Senate Republicans introduced a budget proposal to accelerate tax cuts from the Trump era and raise the borrowing limit, aiming to extend these tax cuts while managing spending reductions. Meanwhile, Allianz's chief economist predicted only one Fed rate cut this year, contrasting with market expectations of multiple cuts, reflecting dovish sentiment amid economic uncertainty. The market responded positively, with the S&P 500 rising 0.67%, the Dow Jones Industrial Average gaining 0.56%, and the Nasdaq Composite increasing 0.87%.

Today, the technology, non-essential consumer goods, materials, industrial, and financial sectors outperformed the S&P 500. Notably, the non-essential consumer goods sector showed exceptional performance. Conversely, the essential consumer goods sector moved in the opposite direction of the S&P 500.

Palantir Technologies Inc. shares rose 3.27% as the company continues to benefit from the growing demand for its AI-powered data analytics platforms. Meanwhile, Tesla Inc. saw its stock price increase by 5.33%, with investor sentiment positively impacted by the potential departure of Elon Musk from his involvement with Dogecoin.

American Rebel's stock surged over 342%, marking a significant rise in its market value. Meanwhile, Innovation Beverage Group saw a substantial increase of 153.65% after securing a distribution deal with Republic National Distribution. In contrast, Jayud Global's stock plummeted by 95.66% due to market concerns over its financial stability. Newsmax also faced a steep decline, with its stock dropping by 77.46% as the company grapples with declining viewership and advertising revenue.

The U.S. stock market is reacting to several macroeconomic developments. President Trump announced plans to implement reciprocal tariffs, including a 25% tariff on foreign autos, which could affect automotive and related industries. Additionally, the U.S. Senate proposed a significant $5 trillion increase in the debt ceiling, impacting fiscal policy and market sentiment. Meanwhile, the Federal Reserve's effective funds rate remains steady at 4.33%, as officials like Fed's Kugler emphasize the importance of resilient economic frameworks amid changing conditions. In corporate developments, Apple shares have faced a significant decline of 4.6%, reflecting broader tech sector volatility.