US Debt Downgrade Sends Ripples Through Markets
US stocks and bonds are declining as the US government faces a debt downgrade. Moody's has reduced the US credit rating due to mounting debts, mirroring actions by other agencies. This could affect interest rates for households and businesses, adding pressure on the economy and financial markets.
U.S. stocks faced downward pressure Monday, with bonds and the dollar experiencing a sharper fall, amid concerns over rising national debt.
The S&P 500 fell 0.4% after Moody's Rating downgraded the U.S. federal government's top-tier credit rating. The Dow Jones and Nasdaq also saw declines as Moody's highlighted relentless government borrowing and political gridlock hindering financial management.
Higher borrowing costs could influence Federal Reserve decisions, increasing interest rates for households and businesses, and potentially slowing economic growth. The downgrade also heightens urgency as Washington approaches debates on tax cuts and borrowing limits.
(With inputs from agencies.)
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