Impact of Trump’s New Budget Passed Today on Next Week’s Stock Market

On July 3, 2025, Congress passed the highly anticipated “One Big Beautiful Bill,” a sweeping fiscal policy package aimed at reshaping U.S. spending and taxation priorities. While the legislation is expected to have long-term implications for the U.S. economy, many investors are now focused on its short-term impact—particularly how Trump’s new budget passed today will influence stock market behavior next week.

📈 1. Equity Rally Likely in Energy & Industrials

One of the most market-moving provisions in the bill is the rollback of clean energy subsidies and the expansion of support for traditional energy sources. Oil, gas, and coal companies were among the top gainers following the announcement, with stocks such as Ramaco Resources and Peabody Energy climbing by double digits. Industrial names, such as Caterpillar and Halliburton, also experienced buying pressure due to increased infrastructure allocations.

These sectors are positioned to benefit in the coming week as institutional investors rebalance portfolios to align with the bill’s fiscal direction. Since Trump’s new budget, which passed today, favors deregulation and capital investment in physical infrastructure, traders are likely to rotate into cyclical and materials-heavy sectors.

🔺 2. Boost to Business & Corporate Stocks

The bill makes the 2017 Trump-era tax cuts permanent and reinstates full expensing of capital expenditures. This provision alone is expected to unleash a wave of planned corporate spending and hiring, particularly in the tech, manufacturing, transportation, and logistics sectors.

Publicly traded firms that heavily invest in equipment and R&D—such as Boeing, Lockheed Martin, and Intel—stand to benefit the most. Next week, traders should watch for increased call option volume and breakout patterns in these names as Wall Street prices in renewed optimism for earnings. With Trump’s new budget passed today, many companies have greater visibility on tax planning and operational costs for the next decade.

⚠️ 3. Rising Bond Yields Could Add Volatility

One of the biggest concerns among analysts is the projected $3–$ 4 trillion increase in the federal deficit over the next decade. The U.S. Treasury is expected to increase short-term borrowing to finance the government’s expanded obligations. This has already pushed up yields on 2- and 10-year Treasury notes.

Higher yields could weigh on interest-rate-sensitive sectors, such as real estate and utilities, while providing a tailwind to financial stocks. Traders should brace for potential volatility, especially if next week’s Treasury auctions show weak demand. The rise in yields may also reignite debates about long-term inflation risks, adding complexity to the market’s reaction to Trump’s new budget, passed today.

💵 4. Dollar Weakness & Inflation Risks

Currency markets are signaling concern. As fiscal expansion combines with no clear offsetting spending cuts, the U.S. dollar has already weakened slightly on expectations of future inflation and deficit monetization. This trend could accelerate next week, especially if global investors perceive U.S. debt as less attractive relative to other developed economies.

Dollar-sensitive assets, such as gold and export-heavy equities, could gain, while domestic consumers may begin to feel the squeeze if inflation expectations rise. With Trump’s new budget passed today, the short-term upside for equities may come at the cost of currency stability and long-term purchasing power.

⚙️ 5. Sector Separation: Winners vs. Losers

The market is already pricing in winners and losers. Traditional energy, industrials, and defense stocks are likely to continue rallying due to favorable allocations in the bill. Meanwhile, sectors tied to green energy, social programs, and healthcare may experience near-term weakness as funding is reduced or reallocated.

Solar, wind, and EV-related names—such as Enphase, SolarEdge, and Rivian—may continue to underperform as institutional capital shifts away from ESG-focused investments. Health insurers and hospital chains could also see a downside due to Medicaid rollbacks. In short, Trump’s new budget, which was passed today, has created a clear line of demarcation between policy-supported and policy-opposed sectors.

🔭 Week-Ahead Outlook Summary

📚 Related Reading

• Reuters: U.S. House Approves Trump’s Mega Budget Bill
• Investor’s Business Daily: Fossil Fuels Rally After Budget Passed
• MarketWatch: Treasury to Flood Market With Short-Term Debt