Market Reactions to Moody's Downgrade and U.S. Tax Bill Fears

In early trading, U.S. stocks dropped as market participants assessed Moody's downgrade of the U.S. sovereign credit rating. Treasury yields simultaneously rose, while the dollar retreated, with investor focus also on future implications of the U.S. tax bill.

The drop in the stock market comes as a response to the U.S. government's fiscal policies, including President Donald Trump's comprehensive tax-cut bill. Approved by a congressional committee, the bill is expected to raise the national debt, driving yields on long-term Treasuries to an 18-month high.

Further developments are anticipated as Treasury Secretary Scott Bessent disputes Moody's downgrade and prepares for the G7 meeting. Meanwhile, Wall Street saw a decline in major indexes, and the dollar hit lows against key currencies amidst global market fluctuations.

(With inputs from agencies.)