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Fiscal fears push bond yields higher as stocks fall

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Bond yields rose and stocks fell as analysts nervously eye America's debt burden.
On May 22, 2025, concerns over fiscal policy and rising government debt levels led to a significant increase in bond yields, with the 10-year Treasury yield jumping to 4.5%, its highest level in months. This surge in yields contributed to a decline in stock prices, as investors shifted towards safer assets amid fears of potential economic instability. The S&P 500 fell by 1.2%, while the Dow Jones Industrial Average dropped 1.5%, reflecting broader market anxiety about the sustainability of current fiscal policies and their impact on future economic growth. Analysts noted that the rising yields could signal tighter financial conditions, potentially slowing down economic activity and affecting corporate earnings.

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