Stock markets closed lower due to concerns over Trump's tax-cut bill and sovereign credit downgrade.

From Zacks Investment Research: 2025-05-21 04:18:00

U.S. stock markets closed lower on Tuesday as concerns over President Trump’s proposed tax-cut bill and a sovereign credit rating downgrade weighed on investor sentiment. The Dow Jones Industrial Average fell 0.3%, the Nasdaq Composite slid 0.4%, and the S&P 500 was down 0.4%. Airbnb Inc. was a major loser in the tech sector, with its stock price down 3.3%. Moody’s downgraded the U.S. sovereign credit rating to Aa1 from Aaa due to the growing budget deficit and rising debt costs. Concerns over Trump’s SALT bill also emerged as Republican lawmakers from Democrat-controlled states expressed disagreement.

The fear-gauge CBOE Volatility Index (VIX) was down 0.3% to 18.09 on Tuesday. Moody’s Investor Services downgraded the U.S. sovereign credit rating to Aa1 from Aaa, citing the growing budget deficit and rising debt costs. President Trump faced opposition from House Republicans over a major tax bill, particularly regarding the tax deduction allowed for state and local taxes (SALT) on federal income tax returns. Five Republican dissidents expressed concerns over the fairness of SALT deductions for hardworking families.



Read more at Zacks Investment Research: Stock Market News for May 21, 2025 – May 21, 2025