Significant losses on Wall Street
The US stock markets suffered significant losses on Wednesday, May 21, 2025, primarily due to interest rate fears and the budgeting plans of Donald Trump. Investors are increasingly concerned about the rising US national deficit and its impacts on the economy and financial markets.
Market development on Wall Street
- The Dow Jones Industrial fell by 1.91 percent to 41,860.44 points.
- The S&P 500 lost 1.61 percent, closing at 5,844.61 points.
- The tech-heavy Nasdaq 100 declined by 1.34 percent to 21,080.36 points.
These losses were triggered by a sluggish auction of US Treasury bonds amounting to around $16 billion; consequently, yields on these bonds increased significantly. Higher bond yields lead to interest rate fears among investors and generally weigh on stock markets.
The role of budget negotiations
The budget negotiations in Washington play a key role: A bill includes, among other things, spending cuts and tax reductions – measures related to Trump’s budget plans – which creates uncertainty and burdens the market.
Impact on market sentiment and Europe
The negative sentiment on Wall Street directly affects investor behavior. Since global markets are closely interconnected, it is expected that these developments could also influence European stock markets – for instance, through increased caution in investments or price losses due to global risk aversion.
In summary:
- The combination of rising government bond yields (interest rate fear) and uncertainties regarding US budget plans leads to significant losses on Wall Street.
- This development noticeably dampens market sentiment.
- Due to global interconnections, this can also have negative effects on European markets.
This assessment is confirmed by recent reports: Already at the start of trading, major indices such as the Dow Jones (-0.76%) or S&P500 (-0.46%) showed weakness; during the day, these losses intensified significantly.