May 19 (UPI) — American markets fell to open the week Monday, reacting to Friday’s news that Moody’s Ratings was downgrading U.S. debt.
The Dow Jones Industrial average was down 44.39 points or 0.10% to 42,610.35, while the S&P 500 declined by 16.44 or 0.28% to 5,941.94 and the Nasdaq Composite was in the red by 88.53 or 0.46% to 19,122.57 by late morning.
On Friday, Moody’s downgraded its rating of U.S. government long-term issuer and senior unsecured ratings to Aa1 from Aaa, becoming the last of the big three credit rating agencies to do so.
The agency also moved its outlook to negative from a previous rating of stable. It initially warned of the downgrade last November.
Treasury yields climbed Monday as bond prices slipped.
The 30-year Treasury yield climbed to 5.03% Monday morning, an 18-month high. The 10-year Treasury yield hit 4.501%, a gain of six basis points.
Tech stocks led the decline Monday amid a sell-off.
Apple dipped sharply to open trading but rebounded by noon. It was still down $3.33 or 1.58% to $207.93 mid-day. Nvidia was down slightly, $0.22 or 0.16% to $135.18 at the same time, while electric vehicle producer Tesla was in the negative by $12.23 or 3.49% to $337.75.
“The Moody’s report didn’t highlight anything that every investor doesn’t already know about the U.S. fiscal situation,” Baird financial analyst Ross Mayfield told CNBC in an interview.
“To me, it just kind of provided a little bit of cover for the market to take a breather here, but nothing that structurally changes our bullishness on where we think we’ll be in the next six to 12 months.”
The developments come amid the backdrop of President Donald Trump’s looming deadline to impose international tariffs that has led to economic turbulence.
