Investing.com--S&P 500 closed higher Monday, recovering early-day losses as investors bought the dip in stocks after Moody’s downgraded its investment grade rating on the U.S., ramping up concerns over slowing economic growth and heightened debt levels.
At 4:00 ET (20:00 GMT), the Dow Jones Industrial Average rose 137 points, or 0.1%, the S&P 500 index was 0.1% lower, and the NASDAQ Composite rise 0.02%.
Moody’s downgrades U.S. rating, cites debt concerns
Credit rating agency Moody’s downgraded the U.S. sovereign credit rating late last week to ’Aa1’ from ’Aaa’, and is the last of the major agencies to cut the prestigious treble-A rating after awarding it in 1919.
The move pushed Treasury yields higher, but Washington downplayed the downgrade, with Treasury Secretary Scott Bessent calling it a "lagging indicator."
Moody’s cited concerns over the country’s growing $36 trillion debt pile, which could be exacerbated by Trump’s plans to cut taxes.
A Congressional committee in the U.S. House of Representatives approved President Donald Trump’s sweeping tax bill on Sunday, setting it up for a House vote this week amid resistance from a group of Republicans.
This bill is estimated to add between $3 trillion and $5 trillion to the national debt over a decade.
Moody’s cut was widely criticized by Trump’s administration, which touted several measures to bring down government spending and debt levels. But the measures, especially the Elon Musk-led Department of Government Efficiency, have so far made limited progress.
Walmart should ‘eat the tariffs’ - Trump
Trump over the weekend said that Walmart (NYSE:WMT) should absorb price increases stemming from higher import tariffs, and warned the retail giant against any price increases.
His warning came after Walmart last week said it will not be able to absorb all of the tariff costs, and will need to increase prices on general merchandise coming in from China. Walmart said that even the lower tariffs agreed to by the U.S. and China last week stood to increase prices.
Walmart’s comments highlighted the growing headwinds faced by U.S. companies dependent on imports, as Trump sticks to his tariff agenda.
Walmart is the world’s biggest retailer and is largely seen as a bellwether for U.S. consumer strength. Its stock fell 1.5%.
Nvidia in spotlight, Reddit slips on downgrade
Nvidia (NASDAQ:NVDA) CEO Jensen Huang on Monday unveiled a host of new artificial intelligence technology -- both for enterprise and consumer applications -- when delivering the keynote address at the Computex AI exhibition in Taiwan.
Speaking for nearly two hours at the event in Taipei, Huang unveiled new AI data center technology, AI cloud and computing products for consumers, as well as AI software for robotic applications.
Unitedhealth Group (NYSE:UNH) rose more than 7% as company insider including new chief executive Stephen Hemsley bought the recent dip in the health insurers stock.
Reddit Inc (NYSE:RDDT) fell 4% after Wells Fargo downgrade the stock to equal weight from overweight at Wells Fargo, citing a threat from Google (NASDAQ:GOOGL)’s roll out of AI-led search.
On the economic front, Fed speakers continued to sound the alarm on policy-driven uncertainty from Washington.
Minneapolis Fed President Neel Kashkari on Monday flagged the Trump administration’s trade policies as significant strain on investor sentiment, undermining the economy’s strong start to the year.
Peter Nurse, Ambar Warrick contributed to this article.