Stocks Recover After Moody’s Downgrade Cuts U.S. Credit Rating

U.S. stocks ended Monday mostly flat despite a credit rating downgrade by Moody’s that triggered a selloff in U.S. debt and pushed Treasury yields higher. The Dow rose 0.3%, while the S&P 500 and Nasdaq gained 0.09% and 0.02%, respectively. Moody’s lowered the U.S. credit rating, prompting concerns over increased borrowing costs and broader economic risks. A Deutsche Bank analyst noted the downgrade was symbolic, as Moody’s had been the last major agency to maintain the top rating. The spike in long-term yields exceeded levels seen after Trump’s “Liberation Day” tariffs, which he later rolled back amid market pressure. The yield surge coincides with a House Republican tax cut bill, which the CBO warns would worsen the $36 trillion national debt.