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crypto.news 2025-05-19 14:08:01

Dow recovers from morning lows, indices nearly flat despite U.S. debt downgrade

Stocks opened lower on Monday as Wall Street flipped negative after Moody’s downgraded the United States’ credit rating. The S&P 500 fell 0.8% at the open, while the Nasdaq Composite dropped 1%, as the downgrade combined with broader market concerns to dampen investor sentiment. The blue-chip index and the Dow Jones Industrial Average each lost more than 200 points in early trading although within the first 45 minutes of trading buyers came in and pushed major indices to nearly flat. As stocks and the dollar reacted lower, Treasury yields spiked. The 30 year Treasury yields climbed to the 5% level, reflecting market concerns over U.S. debt amid Moody’s Ratings downgrade. Any further surges in the 30-year yield will see it hit an 18-year high. Update The 30-year yield is now 5.03%—highest since October 2023. If it goes nine basis points higher, it will be a new 18-year high. pic.twitter.com/s3u8o6y84D — Jim Bianco (@biancoresearch) May 19, 2025 On Friday, the ratings body announced it was cutting down the U.S.’s rating from Aaa to Aa1. Per the firm, the current rating aligns with the country’s debt outlook as signalled by its budget deficit and growing burden of debt refinancing. Read more: Why crypto market is down today: Moody’s U.S. downgrade triggers sell-off The downgrade of the U.S.’s credit rating comes amid the Federal Reserve’s latest decision to keep interest rates unchanged. Despite recent deals with China and the United Kingdom, President Donald Trump’s overall tariff policy has also had an impact and investors eye more clarity and more deals. Commenting on Moody’s downgrade, RBC Capital Markets head of U.S. equity strategy Lori Calvasina told CNBC in an interview : “There’s not a ton of importance here… It’s more symbolic, but at the same time, if it’s going to push 10 year treasury yields up, my market is going to care.” Monday’s downbeat open comes after a largely positive week for U.S. stocks. The Nasdaq Composite closed more than 7% up last week, while the S&P 500 edged more than 5% for a five-day winning streak that had investors upbeat. Even the Dow, which struggled a bit over the week, rose to end the week more than 3% up. With the 10-year yield also surging to above 4.5%, stocks heaved under sell-off pressure. Cryptocurrencies also dipped, with Bitcoin ( BTC ) plunging to lows of $102k after retesting highs of $107k on Sunday. Despite the volatility, analysts are bullish on BTC and crypto, with broader sentiment being that the crypto market still has room for upside continuation. You might also like: Crypto bull run intact despite weekend volatility in Bitcoin

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