Stocks flat as Moody’s downgrades U.S. credit, S&P 500 rally stalls

U.S. stocks were little changed Monday as investors reacted to Moody’s Ratings stripping the U.S. of its last triple-A credit grade and lawmakers advancing a tax bill expected to add significantly to federal deficits.

The S&P 500, coming off a five-day winning streak, rose slightly, while the Nasdaq Composite rose 0.01%. The Dow Jones Industrial Average rose 0.3%, with support from a rebound in UnitedHealth Group shares.

Moody’s late Friday downgraded U.S. debt to AA1, citing “persistent, large fiscal deficits” and higher interest costs. 

The move came as the House Budget Committee approved a tax-and-spending plan from President Trump that would extend cuts and boost spending, raising deficit projections.

The 10-year Treasury yield briefly spiked to 4.56%, its highest level in over a month, before pulling back to 4.46%. Yields on 30-year Treasurys touched 5% before settling near 4.95%. The dollar index fell 0.7%, while gold jumped 1.5% to $3,235 an ounce.

Tech stocks, which led recent gains, traded mixed. Tesla dropped 2% following last week’s 17% rally. Apple slipped 1.5%, while Nvidia, Alphabet, and Meta also declined. Microsoft and Amazon edged higher.

Bitcoin is surging 

Bitcoin (BTC) surged to $105,400, lifting shares of Strategy 3%. Palantir, AMD, and Super Micro Computer each fell over 2%.

JPMorgan CEO Jamie Dimon warned that the full economic impact of tariffs had yet to be felt, while Fed officials signaled no immediate changes to interest rates amid ongoing uncertainty.

Global markets were mixed. European stocks rose slightly, while Asia saw losses. The European Union cut its growth outlook, and Diageo forecast a $150 million hit from tariffs.