Trump’s Sweeping Tax Bill Clears Senate by Razor-Thin Margin

QUICK SNAPSHOT
Global Sentiment: Risk-on
Factors:  Trade Deals Optimism, US Tax Bill

TODAY’S WATCHLIST
- ECB President Lagarde Speaks 
- US June ADP Non-farm Employment Data

THE BIG STORY
In a dramatic 51–50 vote, the US Senate passed President Donald Trump's sweeping tax-and-spending bill late Tuesday, with Vice President JD Vance casting the tie-breaking vote after three Republicans Thom Tillis of North Carolina, Susan Collins of Maine, and Rand Paul of Kentucky joined all 47 Democrats in opposition. The legislation now heads to the House, where some Republican dissent remains. If passed, the bill would extend Trump’s 2017 tax cuts, introduce new breaks for tips and overtime, ramp up military and immigration enforcement funding, and repeal large parts of President Biden’s climate policies. At the same time, it slashes nearly $1 trillion in Medicaid and food assistance and raises the debt ceiling by $5 trillion, stoking concern over the fast-growing $36.2 trillion national debt.

As Washington debated fiscal firepower, Federal Reserve Chair Jerome Powell took the stage to reaffirm the central bank’s independence amid Trump’s escalating calls for aggressive interest rate cuts. Facing the prospect of early replacement well before his term ends in 2026 Powell stood firm. “I’m very focused on just doing my job,” he said to applause, underscoring that the Fed remains committed to its dual mandate of stable prices and maximum employment, regardless of political pressure.

DATA
US manufacturing activity remained in contraction territory for the fourth straight month in June, as uncertainty from the Trump administration’s tariff policy continued to weigh on business confidence and planning. The ISM Manufacturing PMI ticked up slightly to 49.0 from May’s six-month low of 48.5, remaining below the 50-mark that separates expansion from contraction. New orders remained subdued, underscoring a cautious outlook among manufacturers. Meanwhile, the US labour market showed mixed signals. Job openings rose by 374,000 to 7.769 million in May, according to the JOLTS report, reflecting strength in sectors like accommodation and food services, healthcare, and transport. However, hiring slowed and federal job openings dropped by 39,000 amid a White House hiring freeze. 

WHAT HAPPENED OVERNIGHT
US stocks closed mixed on Tuesday. The Nasdaq and S&P 500 ended lower weighed down by losses in major tech stocks, while the Dow posted modest gains in a volatile session marked by thin trading volumes. Investors balanced optimism around potential stimulus with growing concern over the market’s reliance on a few tech giants. Tesla slumped 5.4% after President Trump threatened to pull federal subsidies from Elon Musk’s companies, following renewed criticism of Trump’s expansive tax-and-spending plan. In contrast, casino stocks rallied after Macau reported stronger June gambling revenue, with Wynn Resorts, Las Vegas Sands, and MGM Resorts all surging more than 7%.

US Treasury yields rose on Tuesday as investors assessed fresh economic data and remarks from Federal Reserve Chair Jerome Powell for clues on the timing of potential rate cuts. Speaking at a conference in Portugal, Powell reiterated a data-dependent approach, saying it's unclear whether July would be too early for a rate cut. Following the remarks and economic releases, yields reversed earlier declines. The benchmark 10-year Treasury yield rose 2.3 basis points to 4.25%, while the 2-year yield, more sensitive to Fed rate expectations, climbed 5.8 basis points to 3.779%.

The US dollar slipped again on Tuesday, with the dollar index down 0.02% to 96.74, extending its losing streak to nine sessions and marking the worst first-half performance since 1973. The greenback remained under pressure amid growing expectations of Federal Reserve rate cuts and shifting global sentiment. The euro edged up 0.06% to $1.1793, while sterling rose 0.04% to $1.3739. The dollar weakened 0.27% to 143.62 yen, following data from Japan showing improved business sentiment and the first expansion in manufacturing activity in over a year, despite ongoing US tariffs. 

Brent crude oil prices rose modestly on Tuesday as investors weighed encouraging signs of demand recovery while awaiting clarity from the upcoming OPEC+ meeting on August production plans. Brent crude settled up 0.6%, at $67.11 a barrel, while US West Texas Intermediate crude gained 0.5%, to finish at $65.45.

Day’s Ledger
Economic Data:

• Euro May Unemployment Rate for May
• US Weekly EIA Crude Oil Data
• US June ADP Non-farm Employment Data
• US Total Vehicle Sales for June

Corporate Actions

• Kilitch Drugs to consider raising fund 
• MIRC Electronics to consider raising fund
• New Markets Advisory to consider raising fund 
• Pavna Industries to consider stock split
• PNB Housing Finance to consider raising fund 
• RattanIndia Enterprises to consider raising fund 

Policy Events

• ECB President Lagarde Speaks  
• ECB's De Guindos Speaks  
• ECB's Lane Speaks

TICKERS

• Aquilo House ups AAVAS FINANCIERS stake to 49% after acquiring shares from three promoters in off-market deals, with RBI and CCI approval in place.
• ASHOK LEYLAND June CV despatches rise 3% YoY on strong bus sales; truck sales fall 11% despite marginal gains in LCV volumes.
• AstraZeneca receives CDSCO approval to import Durvalumab for use with chemotherapy in advanced endometrial cancer, expanding its oncology portfolio in India.
• CARE Ratings revises LAURUS LABS’ outlook to stable from negative on improved FY25 operating performance, reaffirming ‘AA’ and ‘A1+’ ratings.
• CCI approves COROMANDEL’s ₹8.2 bln acquisition of 53% stake in NACL Industries, strengthening its crop protection and agrochemicals portfolio.
• CREDITACCESS GRAMEEN raises ₹25.70 billion through loans, ECBs, direct assignments, and credit lines to support growth in its microfinance operations.
• Crocs wins Delhi HC backing to revive suit against BATA and Liberty for copying its footwear design, enabling further legal proceedings.
• EICHER VE Commercial Vehicles June CV sales fall 1% YoY due to weak India demand; Q1 volumes grow 10% on exports and small CVs.
• HEG receives ₹2.82 billion GST demand notice for FY19; confident claims are legitimate and expects department to drop the demand.
• HERO MOTOCORP'S Jun sales up 10% on rural, urban demand; Q1 volumes fall 10%
• HINDUSTAN ZINC contributes ₹876.2 billion to exchequer over five years, including ₹189.6 billion in FY25 despite metal price volatility.
• HYUNDAI MOTOR June despatches drop 6% YoY due to weak local demand; exports grow 13%, SUVs remain key driver.
• JM FINANCIAL acquires remaining 2.98% stake in NBFC unit from Moraine Fund, making JM Financial Credit Solutions a wholly owned subsidiary.
• JSW ENERGY signs 12-year deal with Rajasthan utility to build and operate 250 MW battery energy storage system under viability gap funding.
• LLOYDS METALS Q1 iron ore output remains flat at 4 mln tonnes; commissions pellet plant and slurry pipeline for long-term growth.
• LUPIN hives off OTC unit into new subsidiary LupinLife; Anil Kaushal appointed CEO to scale consumer healthcare business.
• LUPIN receives USFDA approval for Loteprednol eye gel, with 180-day exclusivity in US as first-to-file generic manufacturer.
• MAPMYINDIA wins ₹2.33 billion digital map licensing deal from private company over seven years for domestic business use.
• MARUTI SUZUKI June production falls 4.3% YoY; no Ciaz output. Sales decline 6%, but exports hit record high at 37,842 units.
• NHPC appoints Rajendra Prasad Goyal as interim CMD for two months or until a full-time successor is named.
• NMDC iron ore production up 30% YoY in Q1 to 11.99 mln tonnes; June sales down 4% MoM to 3.58 mln tonnes.
• PNB waives minimum balance penalties on all savings accounts from Jul 1, aiming to support financial inclusion for rural, low-income segments.
• TATA MOTORS sees steepest PV sales drop since Apr 2023; CV sales fall for 13th straight month; EVs gain momentum.

MUST READ

• Cabinet okays ₹990 billion employment linked incentive scheme for 35 mn jobs
• Govt approves ₹1-trillion RDI scheme to boost private-sector innovation
• Sunil Jayawant Kadam takes charge as Sebi's new executive director
• MF funding to NBFCs hits record ₹2.77 trillion in May 2025: CareEdge
• US job openings rise to 7.8 million in May, show labour market strength
• June GST collection up 6.2% YoY to ₹1.85 trillion, but dips from May, April
• India, US inch closer to mini deal as talks enter day 5 to bridge gaps
• Factory activity rises to a 14-month high of 58.4 in June
• BoJ’s Ueda still needs more information to decide next rate hike
• BOK’s Rhee says tariff hit to growth remains problem for policy
• Powell sees US interest rates as ‘modestly restrictive’