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Ottawa Backs Down on Digital Tax Dispute Amid Pressure from Trump White House

Canada has reportedly agreed to delay its planned digital services tax (DST) following pressure from former U.S. President Donald Trump’s administration, according to a recent statement from the White House. The tax, which was originally slated to target tech giants like Amazon, Meta, and Google, had been a major sticking point in U.S.-Canada trade discussions. The White House claimed Canada “caved” to U.S. demands after months of negotiations, with Trump’s team arguing the tax unfairly targeted American firms. The Canadian government, however, framed the delay as a strategic move to preserve economic stability and avoid retaliatory tariffs. Critics within Canada argue that the government’s decision reflects a growing trend of yielding to U.S. economic influence, while others say the delay is pragmatic given ongoing global talks about a coordinated approach to taxing digital revenues. The issue remains contentious, and observers are watching closely to see whether Canada will revive th...
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Stock Market Today: Rising Treasury Yields Spook Investors

         

In today’s volatile stock market, rising Treasury yields have sent shockwaves through the financial world. As investors grapple with the implications of higher interest rates, major US indexes are facing a downward slide.

Key Points:

  • The S&P 500 (^GSPC) fell by 0.7%, while the Dow Jones Industrial Average (^DJI) drifted about 0.9% lower, shedding nearly 350 points.
  • The Nasdaq Composite (^IXIC) also slid more than 0.7%.
  • The yield on five-year Treasurys rose to near four-week highs on Tuesday, while the 10-year yield (^TNX) topped the key 4.5% level.
  • Investors are concerned that the Federal Reserve will keep rates higher for longer, impacting stock valuations.
  • These worries seem to overshadow the hopes for AI growth that recently lifted the Nasdaq to a record high following Nvidia’s post-earnings rally.

What’s Driving the Yields?

  • A government debt auction flopped, leading to a jump in US bond yields.
  • The release of the Fed’s Beige Book later today could provide more insight ahead of Friday’s reading on PCE, the central bank’s preferred inflation gauge.

American Airlines Slashes Earnings Outlook

  • American Airlines (AAL) stock plummeted more than 15% as the airline carrier cut its earnings per share guidance for the current quarter.
  • The company cited higher domestic competition and a loss of corporate share as reasons for the downward revision.
  • Despite robust demand in the airlines industry, American Airlines faces headwinds due to the spike in Treasury yields.

Market Outlook:

  • The rate-sensitive Nasdaq Composite ended the session down 1.6%, while the S&P 500 gave back 1.3%.
  • Yields on the 2-year and 10-year Treasury bonds hit their highest levels since 2006 and 2007, respectively.

Investors are closely monitoring the situation, trying to decipher the impact on Fed policy-making. As the market grapples with uncertainty, it’s clear that rising yields are a major concern. 

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