US stocks showed modest gains on Monday, despite bond yields rising and Moody’s decision to downgrade the US credit rating. Investors remained focused on President Trump’s tariff discussions and their potential impact on the market.
Market Performance Amid Economic Concerns
The Dow Jones Industrial Average (^DJI) saw a slight increase of 0.3%, while the S&P 500 (^GSPC) extended its 5-day win streak. The tech-heavy Nasdaq Composite (^IXIC) also experienced a small rise, reflecting positive momentum in the stock market despite concerns regarding inflation and fiscal policy.
Moody’s Downgrades US Credit Rating
Late on Friday, Moody’s downgraded the US government’s long-term credit rating from AAA to AA1. This downgrade was prompted by growing deficits and a higher burden from US debt refinancing due to high interest rates. This brings Moody’s in line with Fitch and S&P, who had previously downgraded the US, yet the stock market reacted with relative calm.
Ongoing Tariff Discussions and Policy Uncertainty
President Trump’s tariffs continued to dominate headlines, with Treasury Secretary Scott Bessent warning that countries failing to negotiate in good faith during the 90-day pause could face future tariff increases. In a recent interview, Trump also criticized Walmart (WMT), urging the company to bear the costs of tariffs, continuing his pushback against companies showing consumers the effects of his policies.
Focus on Retail Earnings and Economic Indicators
While the economic calendar for this week remains light, market participants are closely monitoring upcoming reports on manufacturing and jobless claims. Additionally, key earnings reports from retail giants Target (TGT) and Home Depot (HD) will provide insight into the retail sector’s health amid ongoing inflationary pressures.
