Stocks Drop, Treasury Yields Rise After U.S. Debt Downgrade

Stocks were falling and Treasury yields were spiking as markets reacted to a late-Friday decision by Moody’s officials to downgrade U.S. sovereign debt.

The Dow Jones Industrial Average dropped 281 points, or 0.7%. The Nasdaq Composite was down 1.4%. The S&P 500 was down 1% and was on track to snap its five-day winning streak.

“Given last week’s US-China trade truce has already been priced into the market, traders may refocus on earnings, and this week’s lineup of retail names could provide more insight into how tariffs might impact companies and consumers,” writes Chris Larkin, managing director, trading and investing at E*TRADE from Morgan Stanley. “But the early reaction to another US debt downgrade suggests the market isn’t out of the volatility woods yet.”