Investors Brace for Stock Futures to Trade After Moody’s Downgrade
Stock futures will begin trading later on Sunday.© Michael M. Santiago/Getty Images
Investors were bracing for stock futures to begin trading later Sunday and for Asia’s markets to open after Moody’s downgraded U.S. sovereign debt from it’s AAA status to Aa1 on Friday.
Moody’s warned that the U.S. is on the trajectory to increase entitlement spending, citing the potential extension of President Donald Trump’s 2017 Tax Cuts and Jobs Act, which could add around $4 trillion to the deficit over the next decade, without the government revenue to keep interest payment ratios at levels comparable to other sovereign nations. Moody’s was the last major credit-rating firm to downgrade U.S. debt.
Treasury Secretary Scott Bessent played down worries about the action by Moody’s after Friday’s market close, telling NBC News on Sunday that ratings firm actions are “a lagging indicator.”
The Dow Jones Industrial Average rose 1,405 points last week, or 3.4%, to 42,655, after the Trump administration agreed to lower its steep 145% tariff on goods from China to 30% while the two sides continued talking. It was the biggest one-week point and percentage gain for the Dow since the week ending April 11, according to Dow Jones Market Data.
In April, Trump announced country-specific tariffs on goods from dozens of countries and then suspended those tariffs for 90 days while the U.S. negotiated bilateral deals, keeping just a 10% across-the-board levy on imports in place.
The Dow is up 1% since the tariffs were announced on April 2, and is up 0.3% so far this year.
The S&P 500 index closed up 5.3% last week, at 5958, in its largest one-week percentage gain since the week ending April 11. The S&P 500 is up 5.1% since tariffs were announced April 2, and is up 1.3% this year.
The Nasdaq Composite ended last week up 7.2%, at 19,211, also the largest one-week percentage gain since the week ended April 11. The Nasdaq is up 9.2% since the tariffs announced on April 2, and is down 0.5% so far this year. |
