Markets React Sharply to Fiscal Uncertainty & Rising US Debt
The 30-year Treasury yield jumped to 5.096%, the highest since 2023, while the S&P 500 fell 1.6%. Nearly all sectors declined, with financials, healthcare, and real estate hit hardest. The downgrade from Moody’s and a lack of appetite for long-duration bonds are adding pressure, while Big Tech also slid amid news of OpenAI’s $6.4B acquisition of Jony Ive’s hardware startup. Markets are signaling concern over US fiscal credibility.
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Moody’s Downgrades U.S. Sovereign Credit — What It Signals for Investors?
Moody’s has officially downgraded the U.S. government from Aaa to Aa1 — the last of the “big three” rating agencies to do so. The driver? Persistently large fiscal deficits, rising debt servicing costs, and lack of a credible path to stabilization.
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