Market Jitters: U.S. Downgrade Sparks Economic Concerns
Wall Street indices are set to open lower as Moody's downgrades the U.S. sovereign credit rating due to growing debt concerns. This downgrade has prompted increased volatility in the markets, impacting tech and growth stocks. Meanwhile, TXNM Energy's acquisition by Blackstone boosts its stock, despite Netflix's decline.
Wall Street's main indexes are poised to open lower as rising Treasury yields follow Moody's downgrade of the U.S. sovereign rating, spotlighting concerns over the country's mounting $36 trillion debt. This marks the last of the major credit agencies to issue such a downgrade, originally setting the U.S. at an 'Aaa' rating in 1919.
Investment strategist Ross Mayfield from Baird emphasized the increased market volatility due to factors like trade headwinds, but particularly because of Moody's recent downgrade. The concerns center on the U.S. deficit as President Trump's tax-cut bill overcame Republican spending cut disagreements to pass through committee.
Yields on government bonds rose while tech stocks were hit hard in premarket trading, as anticipated future profits are impacted by higher rates. Tesla saw a 3.8% fall, leading losses among major tech firms. Meanwhile, TXNM Energy shares soared 9.1% with news of Blackstone's acquisition deal.
(With inputs from agencies.)
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