Share slide on deficit and tariff problems

The stocks on Friday sagged their worst week since the beginning of April. At that time, the market fell because of President Trump's heavenly tariffs. This time the driver is the president's deficit in domestic politics.

The S&P 500 index fell by 0.7 percent on Friday, which increased since Tuesday and increased its film to 2.6 percent for the week. The decline on Friday came when Mr. Trump even threatened steeper tariffs in the European Union and Apple warned that he is also confronted with new tariffs in the USA.

But it was the concerns of the market about the deficit that dominated the week and is likely to exist as it Budget law by the Senate. The legislative template that the House of Representatives cleared on Wednesday extends the tax cuts, adds some new ones and does not significantly reduce the expenditure.

The concern for investors is that if it does not use the expenditure, the government has to take up greatly in order to further finance its business. This concern has heated up a cycle of rising returns on the market for state bonds and falling stock prices.

“The markets continue to be hostage as guidelines from the White House,” said Matt Eagan, a portfolio manager at Loomis Sayles. “While tariffs make headlines, it is the deficit that is most important.”

The returns were slightly declined on Friday, but remained particularly higher than where they started the month: In particular, the return of the 30-year government bond rose over 5 percent for the first time since October 2023.