NEW YORK (Reuters) – U.S. stocks fell on Wednesday as Treasury yields rose and investors digested prospects that passage of U.S. President Donald Trump’s proposed tax-cut bill could swell the federal debt.

All three major Wall Street indexes were lower. The benchmark S&P 500 and the technology-heavy Nasdaq extended losses as long-dated Treasury yields rose following a $16 billion sale of 20-year bonds by the Treasury Department. The yield on benchmark U.S. 10-year notes rose 10.8 basis points to 4.589%. During the session, the 10-year yield hit its highest since mid February.

A Congressional committee set an unusual hearing as House Republicans sought to overcome internal divisions about proposed budget cuts, including to the Medicaid health program.

Nonpartisan analysts said the Republican bill could add between $3 trillion and $5 trillion to the federal government’s $36.2 trillion debt.

“There are any number of headlines, all of which have consequences if indeed they come to pass,” said Michael Farr, chief executive officer at investment advisory firm Farr, Miller & Washington in Washington. “Many of these things are threats that fade rather quickly and markets are trying to digest what’s important or what’s material or what’s perhaps negotiating bluster on behalf of the administration.”

Dow Jones, S&P, and Nasdaq Fell

At 02:19 p.m., the Dow Jones Industrial Average fell 710.26 points, or 1.66%, to 41,968.72, the S&P 500 lost 76.43 points, or 1.29%, to 5,864.03 and the Nasdaq Composite lost 197.29 points, or 1.03%, to 18,945.43.

Ten of the 11 S&P 500 sectors were lower, led by real estate, healthcare, utilities, consumer discretionary and financials. Communication services stocks were advancing.

Google-parent Alphabet rose 3.4%, while Nvidia was down 1.3% and Meta Platforms lost 0.1%.

UnitedHealth Group dropped 5% after a Guardian report said the healthcare conglomerate secretly paid nursing homes thousands of dollars in bonuses to help reduce hospital transfers for ailing residents. HSBC downgraded the stock to “reduce” from “hold”.

Target fell 4.5% after slashing its annual forecast due to a pullback in discretionary spending.

Wolfspeed plunged by nearly 62% following a report that the semiconductor supplier was preparing to file for bankruptcy within weeks.

The S&P 500 has climbed more than 17% from its April lows, when Trump’s reciprocal tariffs roiled global markets.

Morgan Stanley upgraded its stance on U.S. equities to “overweight”, saying the global economy was still expanding, albeit slowly, amid policy uncertainty.

Declining issues outnumbered advancers by a 4.98-to-1 ratio on the NYSE. There were 176 new highs and 78 new lows on the NYSE.

The S&P 500 posted 15 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 51 new highs and 78 new lows.

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(Reporting by Chibuike Oguh in New York; additional reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai, Devika Syamnath and David Gregorio)