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Live Nasdaq Composite: Markets Step Back on Credit Rating Downgrade
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Key Points
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The markets are lower across the board after credit rating agency Moody’s lowered its rating on U.S. debt. Treasury yields are rising.
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Markets Turn Positive
The stock market has managed to crawl its way back into positive territory despite the U.S. debt downgrade by Moody’s. All three of the major stock market averages are now trading in the green, led by a 156-point gain in the Dow Jones Industrial Average. The S&P 500 and tech-heavy Nasdaq Composite are up fractionally.
Canaccord Genuity analysts published a report saying that stocks won’t be in the clear until mid-summer when the tariff pause deadlines kick in.
Moody's Downgrade Doesn't Go Far Enough, This Billionaire Says
Bridgewater Associates founder Ray Dalio reportedly suggested that Moody’s downgrade of the U.S. sovereign credit rating doesn’t grasp the full severity of the threat facing U.S. Treasuries. The billionaire investor contended that Moody’s isn’t factoring in the possibility of the federal government resorting to printing money to cover its debt burdens.
While Treasury yields rise, tech stocks remain under pressure, with the Nasdaq Composite down 0.44%.
Interest Rate Wildcard
Despite the Federal Reserve’s hinting toward two interest rate cuts in 2025, the jury is still out. Atlanta Fed President Raphael Bostic is cited by CNBC as saying that he foresees only one rate cut this year, blaming tariffs and explaining, “For me right now, I’m expecting it’s going to take a bit longer for that to sort out…I’m leaning much more into one cut this year, because I think it will take time, and then we’ll sort of have to see.”
Earnings Season Rolls On
The markets have an opportunity to shift their attention to corporate America this week as earnings season continues to unfold. Earnings are due out from the likes of Home Depot (NYSE: HD), Target (NYSE: TGT), and TJX Companies (NYSE: TJX). TJX stock is up 11% year-to-date. Comparable store sales will be in focus as interest rates remain elevated while inflation is showing signs of abating.
This article will be updated throughout the day, so check back often for more daily updates.
It’s been one step forward, two steps back for the stock market of late. Most recently, the markets have retreated after a sudden downgrade of U.S. debt by credit rating agency Moody’s. The latest setback comes on the heels of a week in which the markets advanced on trade progress between the U.S. and China. Moody’s lowered its rating on U.S. debt by one notch to Aa1 from the highest possible rating, citing the combination of a budget deficit and elevated interest rates. President Trump begs to differ, saying that the world has confidence in the U.S. economy. Nevertheless, the credit downgrade sent Treasury yields higher—pushing the 30-year Treasury yield above 5%—and stocks lower.
Most sectors of the economy are trading in the red, including a 1.4% decline in technology stocks. Magnificent Seven stocks are mostly lower, including a 2.8.% drop in shares of Apple (Nasdaq: AAPL), which is under pressure due to a regulatory probe into its proposed AI tie-up with China’s Alibaba.
Here’s a look at the performance as of morning trading:
Dow Jones Industrial Average: Down 195.75 (-0.45%)
Nasdaq Composite: Down 216.15 (-1.12%)
S&P 500: Down 50.14 (-0.84%)
Market Movers
After Walmart (NYSE: WMT) revealed that it would be raising prices due to the tariff effect, U.S. Treasury Secretary Scott Bessent responded by saying that the big-box retailer will “eat some of the tariffs.” WMT shares are off 2.3% today.
Palantir Technologies (Nasdaq: PLTR) is losing 3.8% in today’s market sell-off but remains close to its recently clinched all-time high level of $130.18 per share.
Novavax (Nasdaq: NVAX) is a gainer today, soaring 25.9% after receiving the regulatory green light for its COVID-19 vaccine.
Reddit (NYSE: RDDT) shares are down 4.4% on a Wall Street downgrade.
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