- Tower contracts on pointed shares are lower Investors weighed new warnings on American debt and the potential for the trade war of President Donald Trump to warm up on Sunday evening. Late Friday, Moody lowered the American credit note a notch. This came when Congress tries to extend Trump’s tax reductions and add new ones, which should deepen federal deficits.
American shares reported a retirement on Sunday evening as investors weighed new warnings on the American debt and the potential for the trade war of President Donald Trump to warm up.
Future for the Dow The industrial average of Jones dropped by 250 points, or 0.58%. S&P 500 term contracts slipped 0.6%, while Nasdaq Under -term contracts dropped by 0.61%.
The yield on the 10 -year treasure increased by 4.6 base points to 4.485% after Moody’s demoted the American credit rating A notch on Friday evening at AA1 from AAA, the highest note.
He cited “the increase of more than a decade of public debt and the payment ratios at levels which are much higher than the sovereigns noted in the same way”.
The dollar dropped 0.16% compared to the euro and 0.13% compared to the yen. Gold joined 1.86% to $ 3,246.40 per ounce. American oil prices were stable at $ 62.50 per barrel, and crude Brent checked less than 0.1% at $ 65.45.
The stock market was on a role since Trump began to stop or back up some of his most aggressive prices. Actually, The S&P 500 is only 3% below its peak After staging a fierce rebound, and some market veterans see more earnings to come.
Friday, reports thatThe American and European Union had started serious negotiationsgave an elevator on the markets after joining earlier this monthTrump’s de -escalation with ChinaAnd a trade agreement which he concluded with Great Britain.
But Sunday, Treasury secretary Scott warned The fact that all countries that do not negotiate in good faith will see the prices falling back at the levels of “Liberation Day”, which sparked an epic sale last month.
DuringInterview on CNNUnion stateHe added that there are 18 “important” trade partners on which the United States is most concentrated, when there are much smaller for which “we can simply find a number”.
“My other feeling is that we will make a lot of regional offers -” this is the rate for Central America, this is the rate for this part of Africa “,” added Bessent.
Moody’s demotion could also limit the amount of additional increase stocks, especially if it sends higher borrowing costs by reversing the yields of the treasury.
But some Wall Street analysts have said that he was not telling investors something new and followed similar movements of Standard & Poor’s in 2011 and Fitch in 2023.
Meanwhile, the Congress controlled by the Republican tries to extend the tax reductions in Trump’s first mandate and add new ones such as the end of taxes on advice, overtime and social security income. While legislators are also looking for discounts of spending, some even calling tax increases over millionaires to increase income, the total impact of tax proposals on the whole would add billions of billions to the budget deficit in the years to come.
This is because the deficit has already exceeded 1 billion of dollars so far this exercise and has reached 2 billions of dollars during previous years. The interest payments of the debt alone are now one of the largest expenditure items, exceeding the pentagon budget.
“During the next decade, we expect greater deficits as law spending increases while government revenues remain largely stable,” Moody’s said on Friday. “In turn, persistent and persistent budgetary deficits will strengthen government debt and government’s interests. The budgetary performance of the United States should deteriorate in relation to its own past and compared to other much appreciated sovereigns. ”
This story was initially presented on Fortune.com
