FirstFT: Trump’s ‘big, beautiful’ invoice deepens investor worries

Immediately’s agenda: Israeli embassy employees killed in Washington; Telegram’s first annual revenue; Nestlé CEO interview; Burkina Faso’s anti-west icon; and has Starlink already received the house race?

Good morning. We start with the market fallout as Donald Trump strikes nearer to passing a sweeping funds invoice that will lengthen tax cuts and improve the US federal debt. Right here’s what you must know.

Market response: US authorities bonds and shares fell. The 30-year Treasury yield reached its highest stage since late 2023 in night buying and selling in New York, extending a multi-day rise. The S&P 500 dropped 1.6 per cent, with greater than 95 per cent of its member shares ending the day decrease. Financials, actual property and healthcare have been the benchmark index’s worst-performing sectors, whereas a sell-off in Huge Tech added to the decline. Bond costs recovered barely throughout Asia buying and selling this morning, whereas futures for the S&P 500 and Nasdaq edged larger.

Why that is occurring: Traders are apprehensive in regards to the US fiscal outlook. The invoice is anticipated so as to add no less than $3tn to the nationwide debt over the subsequent decade. Their fears have been additionally mirrored in a weak $16bn public sale of 20-year Treasuries, which have been offered at their highest rate of interest since 2020. Main sellers — banks required to purchase any unsold bonds — bought 16.9 per cent of the providing, above the common of 15.1 per cent. One analyst famous: “Markets really have no appetite for duration here.” Learn the total story.

• Explainer: Right here’s what Trump’s “big, beautiful” invoice means for the US financial system and the president’s political agenda.

• The FT View: In its present kind, the invoice’s financial penalties danger being far uglier than Trump portrays, writes our editorial board.

For extra from Capitol Hill, enroll for our White Home Watch publication. Right here’s what else we’re preserving tabs on right now:

• Financial knowledge: The Eurozone, UK, US, France and Germany problem manufacturing and companies buying managers’ indices, whereas the UK reviews public sector funds and the European Central Financial institution releases minutes from its most up-to-date rate-setting assembly.

• Chagos Islands: The UK might signal a controversial deal to hand over the territory to Mauritius as quickly as right now.

• Brussels Financial Discussion board: The EU’s financial system commissioner and chief executives of Renault and Electrolux are amongst these set to talk.

• Firms: Johnson Matthey might announce the sale of its catalyst unit to Honeywell in a £1.8bn all-cash deal at its outcomes right now. BT and easyJet additionally report.

Be a part of us for a subscriber-only webinar subsequent Wednesday for insights into probably the most consequential geopolitical rivalry of our time: the US-China showdown. Register now and put inquiries to our panel.

5 extra high tales

1. Two Israeli embassy employees members have been shot and killed in Washington exterior an occasion on the Jewish museum within the US capital late yesterday. Homeland safety secretary Kristi Noem mentioned her division was investigating and vowed to “bring this depraved perpetrator to justice”. Extra on this growing story right here.

2. The EU is providing to increase tariff-free entry for American lobsters to entice Trump right into a broader commerce deal. A 2020 settlement to remove levies on the shellfish expires on July 31, however the bloc’s officers say it could possibly be prolonged as a part of a package deal to take away the US president’s latest tariffs. Andy Bounds has extra particulars from Brussels.

3. Trump attacked South Africa’s President Cyril Ramaphosa over his nation’s alleged mistreatment of white farmers at a televised White Home assembly yesterday. Trump at one level took the unprecedented step of projecting movies on to screens on the wall of the Oval Workplace purporting to indicate the persecution of white farmers. Listed below are extra particulars from the assembly.

• Opinion: South Africa’s white minority does have justified anxieties, writes Alec Russell, however many are thriving and it’s absurd to speak of a “genocide”.

• Qatari jet: The Pentagon has formally accepted the $400mn luxurious jumbo jet for use because the US president’s aircraft, regardless of bipartisan considerations about ethics and safety.

4. Unique: Telegram leapt to a $540mn revenue final yr, because the messaging app achieved fast progress regardless of the continued French authorized proceedings towards its founder Pavel Durov. The Dubai-based group advised traders it went from a $173mn loss in 2023 to its first annual revenue, in keeping with an organization presentation seen by the Monetary Occasions.

5. Unique: The UK has mentioned utilizing new laws to wipe out British Metal’s money owed of near £1bn, which some in authorities consider might ease a sale of the enterprise, in keeping with Whitehall figures. The controversial transfer to erase cash owed to Chinese language proprietor Jingye might harm enterprise confidence within the UK and exacerbate tensions with Beijing.

Information in-depth

Since taking energy in a 2022 coup, Burkina Faso’s Ibrahim Traoré has launched anti-corruption drives, sought to wrest larger management of his nation’s mineral riches from world mining firms and realign away from former colonial ruler France and in the direction of Russia. How did an obscure army officer turn into an anti-western icon on the continent?

We’re additionally studying . . . 

• Nestlé: CEO Laurent Freixe advised the FT that his predecessor “weakened the fabric of the organisation” by diversifying into new merchandise.

• US market: Traders are asking “what next” because the fever over American exceptionalism breaks, writes Katie Martin.

• UK housing: Except you’re prepared to maneuver additional afield, you may be caught in your present residence for longer than you count on, writes Neal Hudson.

• Eurostar’s rivals: Financing, regulation and totally different rail techniques imply potential opponents are years away from launching companies.

Chart of the day

With greater than 7,000 operational satellites circling the Earth, Starlink is by far the dominant power within the trade. Whereas Amazon and rivals from China and Europe are attempting to catch up, has Elon Musk’s firm already received the brand new world house race?

Take a break from the information

What distinguishes the best airport lounges? Frequent flyer Andrew Jones has criss-crossed the world to search out the reply. Sweeping structure, shoeshines and “a sense of the journey that awaits you” are among the issues to look out for.