Moody's downgrade of US credit rating led to rising Treasury yields, falling dollar, and rebounding stocks

From Yahoo Finance: 2025-05-19 17:04:00

The Moody’s downgrade of the U.S. credit rating caused long-dated Treasury yields to rise, the dollar to fall, and stocks to rebound after early losses. Key market moves include 30-year Treasury yields hitting an 18-month high above 5%, the S&P 500 ending up 0.1%, and the dollar weakening against key rival currencies.

The U.S. sovereign credit rating downgrade by Moody’s highlights the nation’s deteriorating fiscal outlook, with concerns about the $36 trillion debt pile. Longer-dated Treasury yields climbed, the dollar weakened, and investors remained unfazed by the news as U.S. stocks rebounded from initial losses, partly due to optimism over trade relations.

Despite the U.S. credit rating downgrade, U.S. stocks largely shrugged off the news, with the S&P 500 ending with a slim gain. Wall Street’s optimism has improved, with the S&P 500 nearing its all-time high after recent gains. The focus remains on fiscal issues as lawmakers debate a sweeping tax bill this week.



Read more at Yahoo Finance: Dealing with the US downgrade