Markets, dollar jump as House advances Trump’s tax cut plans

Global shares and the dollar rose on Wednesday after House Republicans advanced US President Donald Trump’s tax cut plans, while Treasury yields nudged higher after the previous day’s sharp fall.

The Republican-controlled US House of Representatives late on Tuesday narrowly passed Trump’s $4.5 trillion tax-cut plan, sending the budget resolution to the Senate, where Republicans are expected to take it up.

“It’s mainly good for corporate US,” said Lars Skovgaard, senior investment strategist at Danske Bank.

“There’s expected to be less regulation and tax cuts. I would expect it to happen and then it will be positive for markets if they do so.” Sentiment also improved after reports that the US and Ukraine agreed terms of a draft minerals deal.

US stock futures rebounded after a mixed session on Wall Street, with Nasdaq futures rising 0.7%, while S&P 500 futures gained 0.5%.

European shares rose for a second day, with the pan-continental STOXX 600 up 1% to a new record and blue-chip indexes in Frankfurt, Paris and London rising between 0.7% and 1.7%.

“(The plan) moved through just a little bit quicker than people were expecting,” said Tony Sycamore, a market analyst at IG.

US Treasury yields rose slightly as investors anticipate more debt issuance ahead, with the benchmark 10-year yield up 1 basis point at 4.306%, having fallen almost 10 bps on Tuesday.

The two-year yield, which is sensitive to changes in Federal Reserve rate expectations, rose about 2 bps to 4.119%.

Yields had fallen to their lowest in months in the previous session as traders ramped up bets of more Fed rate cuts this year on growing concerns over the outlook for the world’s largest economy.

Data on Tuesday showed US consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February - the latest in a string of surveys suggesting that businesses and consumers were becoming increasingly rattled by the Trump administration’s policies.

Fed funds futures now point to 55 bps of easing priced in by year-end, implying at least two quarter-point cuts, up from about 40 bps a week ago.

Meanwhile, US copper prices surged more than 3.5% after Trump on Tuesday ordered a probe into potential new tariffs on imports of the metal. A massive power outage in copper producer Chile was also providing support.

The dollar regained some ground after falling to its lowest since December 10 earlier this week.

The dollar index, which measures the currency against six other majors, was up 0.3%.

Against the yen, it traded 0.3% higher at 149.47, thanks to the rebound in US Treasury yields.

The euro eased 0.3% to $1.0484, but was not far from a one-month high. Sterling was similarly near a two-month top and last bought $1.2648.

Brent crude oil futures were down 0.4% to $72.75 a barrel having fallen more than 2% in the previous session, while US West Texas Intermediate (WTI) crude slipped 0.3% to $68.72 per barrel.

Gold was little changed at $2,913 an ounce.

NVIDIA EARNINGS AWAITED Artificial intelligence poster child Nvidia reports its quarterly earnings later on Wednesday, which could offer clarity on demand and justify the sector’s lofty valuations.

Investor scepticism has grown over the billions that US tech firms have channelled into AI infrastructure due to slow payoffs and breakthroughs at China’s DeepSeek.

“Any signs of weakness in Nvidia’s report could have outsized effects on investor sentiment towards AI stocks as a whole,” said Saxo’s global head of investment strategy Jacob Falkencrone.

“This earnings report isn’t just about Nvidia ... it’s about whether the AI revolution can maintain its breakneck pace.” Some of Europe’s most popular AI-linked stocks tumbled this week after an analyst note flagged a possible slowdown by Microsoft on data centre leasing, knocking sentiment in the sector.

An index of “Magnificent Seven” stocks, which includes Nvidia, fell 2.5% on Tuesday to its lowest since November 27.

Oil prices held at two-month lows on Wednesday as a potential peace deal between Russia and Ukraine continued to weigh on prices while lower US crude stockpiles provided some support.

Brent crude was down 19 cents at $72.83 a barrel by 1256 GMT and US West Texas Intermediate crude oil futures fell by 13 cents to $68.80.

Prospects for a peace deal between Russia and Ukraine are improving, ING commodities strategists said in a note on Wednesday, adding that the market was also watching for potential implications of a minerals deal between the US and Ukraine.

“This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market,” the note said.

Downside risks on oil prices increased because of US President Donald Trump’s policies, such as initiatives to support higher oil exports by Iraq, said Saxo Bank analyst Ole Hansen. Trump’s tariff policies could also trigger a trade war and curb economic growth, Hansen added.

The US and Ukraine agreed terms of a draft minerals deal central to Trump’s efforts to bring a swift end to the war in Ukraine, sources familiar with the matter told Reuters on Tuesday.

Agencies