United States stock futures declined on Sunday evening (Monday AEST) after Moody’s Ratings downgraded the U.S. sovereign credit rating.
Moody’s was the last of the three major rating agencies to maintain a perfect credit rating for the U.S., and had held the rating since 1917.
By 9:25 am AEST (11:25 pm GMT) Dow Jones Industrial Average futures 0.6% apiece, while Nasdaq 100 futures were down 0.7%.
On Friday, Moody’s lowered the United States' long-term rating by one notch to Aa1 from Aaa, aligning its assessment with other major credit rating agencies. The firm pointed to the federal government’s widening deficit and the heightened cost of servicing debt amid elevated borrowing costs.
The downgrade adds pressure to the bond market and may push yields higher, compounding concerns for an economy already contending with President Donald Trump’s evolving tariff policy.
ANZ analysts wrote: “Downbeat consumer sentiment and a surge in inflation expectations show that tariff-driven concerns are impacting the U.S. economy.
"We expect the FOMC is unlikely to cut interest rates any time soon and forecast the first rate cut in Q3, possibly by the September meeting. This week, initial jobless claims data and preliminary May PMI data will be in focus.”
Last week, Wall Street rallied after the White House struck a temporary deal with China to reduce some tariffs, seen as a positive step toward easing global trade tensions sparked by Trump's earlier tariff proposals.
Investors will now turn their attention to remarks from key Federal Reserve officials, including Atlanta Fed President Raphael Bostic, New York Fed President John Williams, and Dallas Fed President Lorie Logan, who are scheduled to speak later in Monday's session.
