US stock futures down after Moody's lowers US credit rating, impacting market sentiment

From Yahoo Finance: 2025-05-19 06:16:00

U.S. stock futures point to a lower open after Moody’s cut the U.S. credit rating to Aa1 from Aaa due to financing difficulties and high borrowing costs. Dow futures slipped -0.84%, S&P 500 dropped -1.25%, and Nasdaq fell -1.65%. Japan’s debt exceeds 200% of GDP, with lower yields than Treasuries.

Moody’s is the latest to downgrade the U.S. credit rating, following Fitch Ratings in 2023 and S&P in 2011. Despite the downgrade, U.S. Treasuries remain the most secure credit globally. Japan’s debt is over 200% of GDP, with lower yields than Treasuries, according to JonesTrading’s Mike O’Rourke.

Treasury Secretary Scott Bessent warned that tariff rates could revert to higher levels if countries don’t negotiate in good faith with the U.S. President Trump’s strategy is to impose higher tariffs if negotiations fail. Ongoing economic uncertainty may continue to impact markets beyond Moody’s downgrade.

Market strategist O’Rourke predicts that economic uncertainty will drive markets despite the Moody’s downgrade. He emphasizes the stability of U.S. Treasuries and the need to keep the nation’s fiscal situation in perspective. Subscribe to USA TODAY’s Daily Money newsletter for personal finance tips and business news.



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