Senate Republicans are aiming to wipe away some $3.8 trillion in red ink, but not the actual debt itself, from their signature tax-and-spending bill by using an unprecedented parliamentary maneuver.

Led by Majority Leader John Thune of South Dakota, the GOP is pushing through a version of a House bill that could come down even harder on lower-income and disabled Americans, while making permanent some business tax breaks. The Senate bill even seeks to scale back some of President Donald Trump’s populist promises when it comes to taxes on tips and overtime. Both bills seek to extend—and ostensibly need to pay for—the party’s multitrillion-dollar tax cuts during Trump’s first term, which were largely a boon to corporations and America’s wealthy.

Neither pays for it all, however. Both versions are projected to add trillions of dollars to the national debt, perhaps breaching the $40 trillion mark. But Thune and other Senate Republicans hope to use some novel accounting to pretend the extension of those 2017 tax cuts—which are set to expire—adds nothing to America’s tab. The decade-long extension is projected to add $3.8 trillion to deficits.

If successful, the maneuver would upend decades of precedent by sweeping away rules aimed at making it harder for legislators to do permanent damage to fiscal balances. Economists warn it would set a dangerous precedent for future legislation, by allowing the majority party to enact what appears to be a temporary measure and then later setting it in stone without an official cost. But Wall Street didn’t seem to care on Tuesday. The Nasdaq 100 hit a new record. —Jordan Parker Erb and David E. Rovella

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Secretary General Mark Rutte is fighting to stop the NATO summit from spinning out of control after Trump again cast doubt on America’s commitment to the alliance. Rutte has geared the gathering toward drawing Trump close, hoping he will affirm his country’s duty to mutual defense. The Republican though has often stated his admiration for Kremlin leader Vladimir Putin and bragged how he might encourage him to attack Europe—something NATO thinks Putin, who has waged an 11-year war on Ukraine, may be planing (he’s denied having any such designs). Rutte meanwhile is pushing member states to increase defense budgets to 5% of GDP, in part to mollify Trump while also preparing for the possibility of fighting alone.

Mark Rutte, secretary general of the North Atlantic Treaty Organization Photographer: Pierre Crom/Getty Images

In the Middle East, where a ceasefire in Israel’s war with Iran appeared to be holding, it turns out the US attack over the weekend may have failed in its stated goal.

First, Israel launched a surprise attack on Iran, which the Washington Post reported Prime Minister Benjamin Netanyahu had been planning since last year. Part of that plan, the Post reported, included drawing in Trump. On Sunday, that happened when he launched a surprise strike on Iran’s nuclear facilities, using some of the larger non-nuclear bombs in the US arsenal.

In the days since, Trump, 79, has taken to social media to berate the news media for not taking the administration at its word that Iran’s nuclear program had been destroyed. On Tuesday, the New York Times reported that Trump’s own intelligence agencies are saying his bombing of Iran may have set its nuclear program back only a few months. 

US consumer confidence declined in June, underscoring anxiety about the expected impacts on the economy and job market from Trump’s trade war. The Conference Board’s gauge of confidence decreased 5.4 points to 93, data showed Tuesday. This month’s retreat suggests consumers will remain guarded about their spending. Further, home-price gains in the US decelerated in April as buyers pulled back. A national gauge of prices was up 2.7% from a year earlier, the smallest gain since the summer of 2023, according to data from S&P CoreLogic Case-Shiller. That was smaller than the 3.4% annual increase in March.

China could generate over 100 DeepSeek-like breakthroughs in artificial intelligence in the next 18 months, a development that “will fundamentally change” the Chinese economy, according to Zhu Min, a former deputy governor of the People’s Bank of China. China’s GDP growth is expected to slow to 4.5% this year, but the country’s tech sector is seen as a bright spot, with high-tech contributions to GDP expected to exceed 18% in 2026.

A surge in shares of Circle Internet Group, lifted by a wave of optimism about US stablecoins, has investors and market-watchers alike wondering just how much upside could be left in the near-term for the newly publicly-traded company. The blistering rally started on the first day of trading when the stock jumped 168% from its initial public offering price of $31.

Circle is benefiting from euphoria around stablecoin regulations following the US Senate’s mid-June passage of legislation setting up regulations for the cryptocurrencies. But even with the recent momentum, if stablecoins don’t become a widely used and accepted payment method, there could be limited potential for Circle going forward.

Microsoft has been firing its workers by the thousands, and the culling isn’t over. Next up are workers in its Xbox division, the fourth mass termination there in the past 18 months. Xbox has been under pressure from Microsoft executives to boost profit margins since purchasing Activision Blizzard for $69 billion in a deal that closed in 2023. In addition, Microsoft plans to fire thousands more employees next week, largely in sales. The announcement of those dismissals followed Microsoft’s firing of 6,000 other employees, largely in its product and engineering departments. Wall Street reacted positively to the new round of dismissals, sending the company stock up almost 1%.

The Trump administration declared a power emergency in the US Southeast as a blistering heat wave strains grids across the country. The Energy Department’s emergency order allows Duke Energy to exceed certain air pollution limits and take other steps to boost power generation amid soaring demand in North and South Carolina. Most eastern states are under an extreme heat warning.

In the Northeast US, there were blackouts in parts of New York City as the local utility issued a warning to conserve electricity. Power use Tuesday on PJM Interconnection’s 13-state system is expected to test a 14-year high.

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