Did the wheels start to fall off Trump's wagon last night?

[IsaanT]

Last night at midnight, the S&P500 suddenly dropped sharply (see 15-minute chart).  The daily session closed down 1.5%.

This coincided with the announcement of a weak 20-year bond auction (i.e. few wanted to buy the US's debt).  There are also heightened concerns about the burgeoning US government debt and potential fiscal imbalances.

It will be interesting to see where the market is in a week's time.

[LosLobo]

28 minutes ago, IsaanT said:

Last night at midnight, the S&P500 suddenly dropped sharply (see 15-minute chart).  The daily session closed down 1.5%.

This coincided with the announcement of a weak 20-year bond auction (i.e. few wanted to buy the US's debt).  There are also heightened concerns about the burgeoning US government debt and potential fiscal imbalances.

It will be interesting to see where the market is in a week's time.

 

You're right to be paying attention. The sharp drop in the S&P500 last night did line up with the weak 20-year bond auction — a clear sign that investors are growing uneasy about U.S. fiscal policy.
 

What’s spooking the market isn’t just the size of the debt, but who benefits from the proposed budget. The “One Big Beautiful Bill” pushes massive tax cuts for the ultra-wealthy while slashing key social programs. It's projected to add $4–5 trillion to the deficit over the next decade. Bond buyers are starting to balk — and when bond demand dries up, yields rise and stocks feel the pressure.
 

It’s not just about one bad auction — it’s about a creeping realization that the U.S. might be entering a structurally unsustainable fiscal path. If that continues, we could see more of this volatility.
 

Definitely a week to watch.
 

And here’s the kicker: this legislation isn’t just fiscally reckless — it’s a full-scale economic realignment. It guts support for the working majority while handing windfalls to billionaires. That might please a few donors, but it risks hollowing out the base of the U.S. economy — the very people who keep demand alive. The market’s not driven by fairness, but it does care about instability. And right now, it smells smoke.

[BKKKevin]

The US no longer has any friends willing to buy its debt...

Are we tired of winning yet?... 

[Everyman]

1 hour ago, LosLobo said:

 

You're right to be paying attention. The sharp drop in the S&P500 last night did line up with the weak 20-year bond auction — a clear sign that investors are growing uneasy about U.S. fiscal policy.
 

What’s spooking the market isn’t just the size of the debt, but who benefits from the proposed budget. The “One Big Beautiful Bill” pushes massive tax cuts for the ultra-wealthy while slashing key social programs. It's projected to add $4–5 trillion to the deficit over the next decade. Bond buyers are starting to balk — and when bond demand dries up, yields rise and stocks feel the pressure.
 

It’s not just about one bad auction — it’s about a creeping realization that the U.S. might be entering a structurally unsustainable fiscal path. If that continues, we could see more of this volatility.
 

Definitely a week to watch.
 

And here’s the kicker: this legislation isn’t just fiscally reckless — it’s a full-scale economic realignment. It guts support for the working majority while handing windfalls to billionaires. That might please a few donors, but it risks hollowing out the base of the U.S. economy — the very people who keep demand alive. The market’s not driven by fairness, but it does care about instability. And right now, it smells smoke.

 

Calling the  Trump tax cuts “tax cuts for the wealthy” has always been total nonsense. It comes down to, which is more? 5% of 50,000 or 2% of 500,000? 

 

The latter is more in absolute terms, even though the percent is larger on the first value. But saying tax rates are lower on the second is just dishonest.

 

If the tax cuts expire (and they should, it’s the best option) then watch how fast the narrative shifts to describing it as a tax increase on everybody. Nobody will even mention “the rich.” 

[LosLobo]

4 hours ago, Everyman said:

 

Calling the  Trump tax cuts “tax cuts for the wealthy” has always been total nonsense. It comes down to, which is more? 5% of 50,000 or 2% of 500,000? 

 

The latter is more in absolute terms, even though the percent is larger on the first value. But saying tax rates are lower on the second is just dishonest.

 

If the tax cuts expire (and they should, it’s the best option) then watch how fast the narrative shifts to describing it as a tax increase on everybody. Nobody will even mention “the rich.” 

 

Wait — you asked yourself a question just so you could answer it and call everyone else dishonest. That’s very clever.

Then you said:
“Saying tax rates are lower on the second is just dishonest.”

But the second rate is 2%. The first is 5%.
So you’re literally saying it’s dishonest to state that 2 is less than 5?

That’s not an argument.
If your logic can’t survive its own example, it might be time to rethink the point.

Seems reality has been optional for some folks for a while now.

[Yellowtail]

I think weak bonds typically push people to equities. 

 

Gold was down and the USD up the same day, so where's the money going? 

[Stocky]

1 hour ago, Yellowtail said:

so where's the money going? 

Emerging markets are popular

 

https://www.cnbc.com/2025/05/22/emerging-markets-next-bull-market-sell-us-market-watchers.html

 

[Cameroni]

You do realise the S&P had a massive drop a few days ago and swiftly went back up to pre-tariff levels?

 

Don't you get tired of crying Cassandra non-stop? Surely the S&P will recover as swiftly as it did recently. How are any wheels falling off anywhere?

[NoDisplayName]

9 hours ago, IsaanT said:

This coincided with the announcement of a weak 20-year bond auction (i.e. few wanted to buy the US's debt).  There are also heightened concerns about the burgeoning US government debt and potential fiscal imbalances.

 

Something to do with Trump's latest stable genius idea, "restructuring" the debt as 100-year "forever bonds" at 0% interest.

 

called the “Mar-a-Lago Accord,” it would involve several stages. First, the U.S. would try to force some foreign creditors, which hold large amounts of long-term Treasury notes, to trade them in for special extra-long-term Treasurys.

 

Bloomberg reports that the replacements would be 100-year, non-tradeable zero-coupon bonds.

[topt]

1 hour ago, NoDisplayName said:

 

Something to do with Trump's latest stable genius idea, "restructuring" the debt as 100-year "forever bonds" at 0% interest.

 

called the “Mar-a-Lago Accord,” it would involve several stages. First, the U.S. would try to force some foreign creditors, which hold large amounts of long-term Treasury notes, to trade them in for special extra-long-term Treasurys.

 

Bloomberg reports that the replacements would be 100-year, non-tradeable zero-coupon bonds.

Good luck with that.....I think China hold rather a large amount of said securities........

[Everyman]

17 hours ago, LosLobo said:

 

Wait — you asked yourself a question just so you could answer it and call everyone else dishonest. That’s very clever.

Then you said:
“Saying tax rates are lower on the second is just dishonest.”

But the second rate is 2%. The first is 5%.
So you’re literally saying it’s dishonest to state that 2 is less than 5?

That’s not an argument.
If your logic can’t survive its own example, it might be time to rethink the point.

Seems reality has been optional for some folks for a while now.

what the hell are you talking about 

[Yellowtail]

12 minutes ago, Everyman said:

what the hell are you talking about 

He's making the argument that 2 million is less than 5 hundred. 

[LosLobo]

1 hour ago, Everyman said:

what the hell are you talking about 

Obviously like The Leader you struggle with lots of words—maybe this is better for you!


Big Beautiful Bill — LosLobo™

https://www.usatoday.com/story/graphics/2025/05/21/winners-losers-trump-big-tax-bill/83744635007/

[Yellowtail]

24 minutes ago, LosLobo said:

Obviously like The Leader you struggle with lots of words—maybe this is better for you!


Big Beautiful Bill — LosLobo™

https://www.usatoday.com/story/graphics/2025/05/21/winners-losers-trump-big-tax-bill/83744635007/

You know the bottom ~47% pay no federal income tax, and the top 20% pay over 80% of all income taxes, yes? 

 

 

So what you are saying is that the bottom 20% (that pay nothing) are going to get less of the money taken from the top 20%, that pay over 80% of all federal income taxes. 

 

So that's how the left buys votes....

[IsaanT]

22 hours ago, Cameroni said:

You do realise the S&P had a massive drop a few days ago and swiftly went back up to pre-tariff levels?

 

Don't you get tired of crying Cassandra non-stop? Surely the S&P will recover as swiftly as it did recently. How are any wheels falling off anywhere?

Shall we look at the facts?

I put out several posts at what I shall call the market top (mid to late Feb).  The market retraced since that initial drop but it hasn't returned to the former highs.

This week the market dropped abnormally quickly, which I noted as the first sign of trouble ahead.

 

And have you seen the pre-opening drop on the S&P500 Futures this afternoon?  I am interested because it makes me a lot of money.  I mention the movements here because I know there are plenty here with a vested interest in the state of the markets, and the economy.

For you, where maybe ignorance is bliss, wisdom is folly.