Wall Street plunges after US credit rating downgrade
According to webangah News agency, U.S. stock futures declined sharply following Moody’s decision to cut the nation’s credit rating from its highest tier for the first time in 108 years. The downgrade reflects concerns over mounting federal budget deficits,debt servicing challenges,and rising borrowing costs.
At 6:10 AM ET, Dow Jones futures fell 0.84%, S&P 500 futures dropped approximately 1.25%, and tech-heavy Nasdaq futures plunged 1.65%.
Moody’s became the last major ratings agency to downgrade the U.S., following Fitch’s move to AA+ from AAA in 2023 and Standard & Poor’s similar action in 2011.
“While U.S. Treasuries remain the world’s safest credit asset, we agree with analysts that America’s fiscal trajectory is unsustainable,” said Mike O’Rourke, Chief Market Strategist at Jones Trading.
The strategist noted that U.S. federal debt has reached 125% of GDP, comparable to Japan’s levels two decades ago – though Japan now carries debt exceeding 200% of GDP while maintaining substantially lower bond yields than Treasury notes.
Treasury Secretary Scott Bescent warned Sunday that trade tariffs could revert to unprecedented April levels unless nations negotiate with “good faith.” The remarks came amid ongoing market reactions to the ratings cut.
