Market Jitters Over a ‘Big, Beautiful’ Bill

America’s swelling federal deficit is unnerving küresel investors.Credit…Haiyun Jiang for The New York Times

“A bad risk”

Volatility has returned to the markets. As President Trump’s trade war continues, küresel investors are fretting about America’s rocky finances while congressional Republicans negotiate a spending megabill that could add $3.3 trillion to the deficit over the next decade.

House Republicans, holding a tiny majority, are aiming for a floor vote this week whose outcome is uncertain. Trump, whose promised tax cuts hinge on the bill’s passage, is heading to Capitol Hill on Tuesday to try to get lawmakers onboard.

Investors are wary of the fiscal risk. The prospect of adding significantly to the federal deficit has given the normally rock-solid market for U.S. government debt a roller coaster feel lately. Monday saw a rapid sell-off in 30-year Treasury bonds, in which yields jumped to their highest level since 2023 after Moody’s cut America’s triple-A credit rating on Friday.

Things are quieter on Tuesday, with the 30-year Treasury at 4.93 percent.

Analysts see a pattern. Foreign investors appear to be shying away from U.S. assets, including the dollar and Treasury notes and bonds. The “sell America” trade picked up in the early days of Trump’s tariff fight and shows signs of accelerating as a vote nears on the Republican tax-and-spending bill.

Monday’s wild market swings may indicate “the slow moving trend of overseas investors selling Treasuries but domestic investors increasing their holdings,” Jim Reid, a Deutsche Bank strategist, wrote in a research note on Tuesday. Torsten Slok, chief economist at Apollo Küresel Management, sees a similar course.

Wall Street is watching the bond market. C.E.O.s, economists and the Fed have long warned that America’s fiscal hole is unsustainable and may lead to higher borrowing costs for households and companies, as well as an erosion in the value of U.S. assets like government bonds.