S&P 500 opens lower after Moody's downgrades US credit rating, indicating a negative impact

From Investing.com: 2025-05-19 09:32:00

The S&P 500 index opened lower on Monday after Moody’s downgraded the US credit rating to ‘Aa1’ from ‘Aaa’. The index is expected to open 1.1% lower, testing the market’s resilience and potentially correcting the recent uptrend. Despite the recent gains, the market faces a significant test ahead.

Last week, the S&P 500 index jumped 5.27% as investors cheered the White House’s deal with China. However, the Moody’s downgrade has shifted short-term sentiment, leading to futures indicating a significant pullback to start the week.

The Nasdaq 100 index is expected to pull back by 1.5% today after approaching the 21,500 level last week. The market may undergo profit-taking action, but no confirmed negative signals are evident.

The VIX volatility index dipped to a new local low of 17.15 on Friday, indicating less fear in the market. However, investors should be cautious as a dropping VIX could signal a potential market reversal.

S&P 500 futures contract is retracing recent advances, indicating a negative open with futures down 1.1% in premarket trading. Support remains near the 5,870 level, and traders should be cautious of potential profit-taking after the recent rally.



Read more at Investing.com: S&P 500: Rally to Pause as Moody’s Downgrades US Credit Rating