US markets open lower, Dow plunges over 250 points amid Moody’s downgrade and debt concerns
US stock marketstoday: US stock markets opened sharply lower on Monday after Moody’s downgraded the country’s sovereign credit rating, citing concerns over escalating federal debt and long-term fiscal slippage.The downgrade rattled investor confidence, triggering broad-based selling across equities and lifting market volatility.At the opening bell, the Dow Jones Industrial Average dropped 288.77 points or 0.68 per cent to 42,365.97, while the S&P 500 fell 56.68 points or 0.95 per cent to 5,901.70. The Nasdaq Composite led the decline, plunging 235.60 points or 1.23 per cent to 18,975.50.The downgrade by Moody’s was prompted by projections that US federal deficits could rise to nearly 9 per cent of GDP by 2035, up from 6.4 per cent in 2024, mainly due to higher interest payments, entitlement costs, and relatively weak tax revenue. The rating agency also flagged the potential extension of Trump-era tax cuts, which could add $4 trillion to the deficit over the next decade.The caution sparked a flight to safety, pushing the CBOE Volatility Index (VIX) up 11.14 per cent to 19.16, and lifting the yield on the 10-year US Treasury to 4.539 per cent, up 10 basis points.Commodities reacted with mixed signals. Gold surged $49 or 1.54 per cent to $3,236.20 per ounce as investors sought safe-haven assets, while US crude oil edged lower by $0.07 or 0.11 per cent to $62.42 per barrel, reflecting broader market risk aversion.On the currency front, the euro gained against the dollar, with the EUR/USD pair rising 0.833 per cent to 1.126, while the dollar slipped against other major currencies amid concerns over US fiscal health.The opening weakness follows a week of solid market gains, which were partially fuelled by hopes of easing US-China trade tensions. However, the renewed focus on structural debt challenges and policy uncertainty in Washington has once again put global risk sentiment on edge.Earlier, Futures trading reflected the nervousness, with the S&P 500 down 1.1 per cent, the Dow Jones Industrial Average futures falling 0.6 per cent, and the Nasdaq futures tumbling 1.5 per cent.Investor anxiety over the US fiscal path weighed on the US dollar, which slipped to 144.96 yen, down from 145.65 yen. The yield on the 10-year US Treasury climbed to 4.55 per cent, up from 4.44 per cent Friday, as traders sought safer assets.In corporate headlines, Capital One finalized its long-anticipated acquisition of Discover, over a year after it was announced. Shares of Capital One dipped slightly, down just over 1 per cent in premarket trading.Another market catalyst this week is JPMorgan’s investor conference, where comments from CEO Jamie Dimon—often outspoken on global economic risks—will be closely monitored. Shares of JPMorgan were slightly lower ahead of the opening bell.In Europe, sentiment was similarly weak. Germany’s DAX slipped 0.1 per cent, France’s CAC 40 declined 0.8 per cent, and the UK’s FTSE 100 shed 0.4 per cent.In Asia, markets also closed lower after Chinese data revealed a softer-than-expected 5.1 per cent rise in April retail sales and a slowdown in industrial output growth to 6.1 per cent, from 7.7 per cent in March. The moderation suggests a possible build-up in inventories and a more cautious tone from consumers and businesses amid the ongoing trade friction with the USHong Kong’s Hang Seng edged down 0.1 per cent to 23,332.72, while the Shanghai Composite was nearly flat at 3,367.58. Alibaba’s shares in Hong Kong dropped 3.4 per cent following reports that US regulators are reviewing a potential Apple-Alibaba AI collaboration in China.Elsewhere in Asia, Tokyo’s Nikkei 225 fell 0.7 per cent, South Korea’s Kospi dropped 0.9 per cent, Australia’s S&P/ASX 200 slid 0.6 per cent, and Taiwan’s Taiex was down 1.5 per cent.Oil prices were also under pressure. US crude declined 58 cents to $61.39 per barrel, while Brent crude, the international benchmark, slipped the same amount to $64.83.
