Tensions between the US and China, debt pressure on Wall Street stocks

• Dow Jones drops 400 points on US-China tensions
• S&P 500 halts winning streak on tax warning
• US bond yields climb back above 5%

U.S. stocks closed lower on Wednesday, reflecting renewed concerns about U.S.-China relations and the fiscal impact of the Trump administration's budget proposal. The Dow Jones Industrial Average fell 0,9%, down more than 400 points. The S&P 500 fell 0,6%, while the Nasdaq lost 0,2%.

The profit-taking comes after a temporary trade truce between the world's two largest economies. However, the situation has become volatile again after the US government issued fresh warnings against Huawei's use of artificial intelligence chips, reigniting tensions in the semiconductor sector.

Pressure is mounting in Congress over Trump's proposed tax and spending bill. According to sources, the president is pressuring his Republican allies to give in on certain demands in order to speed up the bill's approval. The impasse and signs of fiscal imbalance have contributed to rising yields on U.S. government bonds.

The 30-year Treasury yield has once again surpassed the 5% level, while the 10-year bond is trading above 4,5%. The move highlights the market's concern about the sustainability of US debt in the face of possible spending increases.

In addition, the retail sector was highlighted after Target's earnings release, which is used as a barometer to measure the economic impact of trade tariffs. The market's negative response to the company's projections reinforced the cautious tone among investors.

The combination of domestic fiscal uncertainty and foreign trade disputes is limiting risk appetite and directly affecting major US stock indexes. The focus remains on developments in Washington and the next steps in relations with Beijing, especially in the chip and technology sector.