U.S. stock futures opened lower on Monday as investors reacted to Moody’s (MCO) decision to downgrade the U.S.’s credit rating. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) ere down 1.74%, 0.87%, and 1.31%, respectively, at 4:46 a.m. EST, May 19.
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Moody’s lowered the U.S.’s long-term credit rating by one notch to Aa1 from the previous Aaa on Friday. The rating agency cited rising government debt, increasing interest costs, and persistent political gridlock as key reasons for the downgrade.
This rating downgrade could put downward pressure on bond prices, potentially leading to higher yields. However, it must be noted that despite concerns, Moody’s maintained a stable outlook, citing the U.S. dollar’s global reserve status and strong economic fundamentals.
This development follows a positive week for Wall Street, where investor sentiment was boosted by the White House’s agreement with China to temporarily reduce tariffs. This deal was viewed as a positive step for global trade after President Trump’s initial proposal for significant import taxes.
Last week saw strong gains across the major indices, with the technology-heavy Nasdaq Composite (NDAQ) leading with a surge of over 7%. The S&P 500 climbed by over 5%, marking a five-day winning streak. Also, the blue-chip Dow Jones rallied by more than 3%.
Looking ahead, investors will pay close attention to speeches from several Federal Reserve officials, including Atlanta Fed President Raphael Bostic, New York Fed President John Williams, and Dallas Fed President Lorie Logan.
In addition, the U.S. leading economic indicators data for April is scheduled for release today. This report helps predict economic trends by tracking various factors.
Meanwhile, the U.S. 10-year treasury yield was up, floating near 4.535%. Simultaneously, WTI crude oil futures are trending lower, hovering near $64.95 per barrel as of the last check.
At the same time, the Gold Spot U.S. Dollar Price rose to nearly $3,240 per ounce on Monday, as investors sought safe-haven assets following Moody’s downgrade of the U.S. credit rating.
Elsewhere, European indices opened lower today, as investors reacted to Moody’s U.S. credit downgrade. Also, traders kept an eye on geopolitical shifts, such as a provisional EU–UK deal on defense and security cooperation, and fisheries, among others, ahead of their summit.
Asia-Pacific Markets Ended Lower Today
Most of the Asia-Pacific indices were in the red today, as investors reacted to Moody’s downgrade of the U.S. credit rating and China’s latest economic data, such as lower-than-expected retail sales and a slowdown in industrial output.
At the same time, the Hong Kong index was down 0.05%. Further, Japan’s Topix and Nikkei indices declined 0.08% and 0.68%, respectively. Also, China’s Shanghai Composite index closed lower by 0.08%, while the Shenzhen Component index gained 0.004%.
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