Stocks Steady as Moody’s Downgrades U.S. Credit

Stocks hold flat after Moody’s cuts in the U.S. credit outlook, stalling the S&P 500 rally and raising investor concerns over fiscal stability.

Investors responded to Moody’s decision to revoke the United States’ final triple-A credit rating and lawmakers’ passage of a tax measure anticipated to substantially increase federal deficits with little change in U.S. stocks on Monday.

The Nasdaq Composite rose 0.01%, while the S&P 500 rose marginally, following a five-day winning streak. UnitedHealth Group shares experienced a rebound, contributing to a 0.3% increase in the Dow Jones Industrial Average.

Late Friday, Moody’s downgraded U.S. debt to AA1, attributing the decision to”persistent, large fiscal deficit” and increased interest rates.
The action was taken in response to the House Budget Committee’s approval of a tax-and-spending plan from President Trump. This plan would increase expenditure and extend cuts, thereby increasing deficit projections.

The 10-year Treasury yield reached its most significant level in over a month, 4.56%, for a brief period before reverting to 4.46%. The yield on 30-year Treasurys reached 5% before ultimately stabilizing at approximately 4.95%. The dollar index experienced a 0.7% decline, while gold experienced a 1.5% increase to $3,235 per ounce.

Tech equities, which have been the driving force behind recent gains, were traded in a mixed manner. Following the 17% increase that Tesla experienced last week, the stock experienced a 2% decline. Apple experienced a 1.5% decline, and Alphabet, Meta, and Nvidia also experienced losses.

Microsoft and Amazon experienced an increase in their respective stock prices.
Bitcoin is experiencing a significant increase in
Strategy’s shares increased by 3% as Bitcoin reached $105,400. AMD, Palantir, and Super Micro Computer all experienced a decline of more than 2%.

JPMorgan CEO Jamie Dimon warned that the full economic impact of tariffs had yet to be felt, while Fed officials signaled no imminent changes to interest rates amid ongoing uncertainty.

Global markets were divided. European stocks experienced a slight increase, while Asia’s equities experienced a decline. Diageo anticipated a $150 million loss due to tariffs, and the European Union reduced its growth forecast.