Wall St. stocks tumble as fears mount about US debt

US stocks closed sharply lower on Wednesday as Treasury yields spiked on worries that US government debt would swell by trillions of dollars if Congress passes President Donald J. Trump’s proposed tax-cut bill.

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All three major Wall Street indexes closed with their biggest daily losses in a month. Small cap stocks also fell sharply, with the Russell 2000 index posting its biggest daily loss since April 10.

Longer-dated Treasury yields rose after the Treasury Department's $16-billion sale of 20-year bonds met soft demand from investors. The yield on benchmark US 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.