Tax cuts on the back burner are sending stocks into a tailspin.

Despite President Trump’s repeated statements, Senate Republicans went ahead anyway and passed a huge spending bill without any DOGE offsets and most importantly no Trump tax cuts. The stock markets have been watching this all week and don’t like it one bit. On Friday, the Dow fell more than 700 points, after dropping nearly 400 points Thursday, and score that a 1,300 point swoon for the week.

House Republicans are working hard to put together a big, beautiful bill as requested many times by Mr. Trump. Yet the Senate shenanigans have been front and center all week.

Instead of renewing 100 percent depreciation expensing to promote business investment, or a 15 percent corporate tax for products made in America, or a 20 percent deduction for small businesses — all of which would boost middle- and lower-income laborer wages and productivity.

Steve Forbes calls it “2025’s Tax Time Bomb: GOP’s Last Chance To Prevent Economic Shock.”

If there is no Republican tax bill, the standard deduction per couples will drop to around $15,000 from $30,000. The child tax credit will fall back to $1,000 from $2,000. And let’s not forget tax-free tips, overtime, and tax relief for seniors.

The Trump package would re-incentivize and re-privatize the economy. More work effort, more investment, more profits to pay higher wages, lower consumer prices, and higher stock market returns.

Only the GOP messaging coming out of the Senate right now has put tax cuts so far back on the back burner that they may well fall off the stove altogether. And the stock market doesn’t like this one bit. There are other warning signals for stocks.

The Michigan Consumer Sentiment index has fallen two straight months. One-year inflation expectations have jumped all the way up to 4.3 percent in February from 2.8 percent last December. The S&P Global PMI is pointing down, Walmart warned of sluggish sales for the year ahead, and retail sales overall plunged in January.

Wall Street is still worried about tariffs, though I think investors are wrong about this. Mr. Trump’s reciprocal trade policy will eventually reduce tariffs and prices, though he himself has warned there could be some short-term one-off price increases.

At least for now, the economic signals are flashing slower growth and higher inflation. Not good. A recent McLaughlin poll asking about the most important issues for Mr. Trump shows cutting taxes at 57 percent, securing the border at 24 percent, with national defense at only 8 percent. 

Senator Paul has called the Senate bill “just a spending bill, which I think is a waste of an election. And it goes against what President Trump is saying and against what Elon and DOGE are doing.” The stock market agrees and doesn’t like it one bit.

From Mr. Kudlow’s broadcast on Fox Business Network.