Monthly market roundup: Unpacking the One Big Beautiful Bill

August 2025 – The One Big Beautiful Bill Act (OBBBA), the tax and spending legislation passed by Congress and signed into law last month, has major implications for the economy, for investors, and for taxpayers. In August’s CIO Perspectives newsletter, TIAA Wealth Management’s CIO team does a deep dive into all of them.

“Signed into law last month, the One Big Beautiful Bill Act (OBBBA) is definitely big—nearly 900 pages—but beauty may be in the eye of the beholder,” writes Niladri “Neel” Mukherjee, TIAA Wealth Management’s chief investment officer. “Our own opinion is that OBBBA is poised to benefit manufacturers and high-income taxpayers, may disadvantage low-income consumers, and will likely have mixed impacts for stocks and bonds.”

What do investors need to know about OBBBA? Here are key insights from CIO Perspectives:

• Equities: OBBBA includes tax incentives and business provisions aimed at boosting domestic manufacturing investments. Chipmakers, artificial intelligence (AI) companies, and manufacturers are positioned to gain, Mukherjee writes in CIO Perspectives. OBBBA could also help small cap and cyclical stocks, as these companies “have been hit hardest by tariff turmoil but now stand to benefit from increased business investment.”
• Treasury bonds: Though OBBBA worsens the U.S.’s fiscal outlook, Mukherjee believes concerns about the federal debt are already reflected in yields of long-term Treasury bonds relative to bonds with shorter maturities.
• Corporate bonds: OBBBA should be positive for corporate bonds. “The provision allowing first-year deductibility of qualifying capital expenditures should boost business cash flows, further strengthening already healthy corporate balance sheets,” Mukherjee writes.
• Municipal bonds: OBBBA preserves the tax exemption granted to municipal bonds.

OBBBA and your taxes

The new legislation is expected to lower tax bills for many, especially for upper-income households, according to CIO Perspectives. OBBBA increases the standard deduction, raises the state and local tax (SALT) deduction cap, reduces taxes on tips and overtime, permanently increases the estate and gift tax exemption to $15 million (indexed for inflation), and preserves income tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025.

OBBBA’s tax provisions will be fully covered in TIAA Wealth Management’s Year-End Tax Planning Guide, set to be published in October. For those who want to get started on 2025 taxes right away, our Wealth Planning Strategies team has published The One Big Beautiful Bill Quick Reference Guide, which reviews the law’s main tax provisions.

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For more insights on market and economic conditions—and to discuss the implications for your investment portfolio and financial plan—talk to your TIAA Wealth Management advisor. Don’t yet have an advisor? Schedule an appointment.