Confidence Blow: Moody's Downgrades US Rating
US stock markets closed almost unchanged on Monday. However, investor optimism came under pressure after a loud statement from ratings agency Moody's: the US's top credit rating is no longer relevant.
$36 Trillion Is Too Much Even for a Superpower
Moody's has stripped the US of its top sovereign rating of "Aaa", downgrading it to "Aa1". The reason is the rapidly growing national debt, which together with interest obligations has reached an astronomical sum of 36 trillion dollars. This was announced after the close of trading on Friday, which affected investor sentiment at the beginning of the new week.
The market is recovering, but anxiety remains
Although stock indices felt pressure at the beginning of the session, the situation stabilized by its end. The main S&P 500 index ended the day almost at the same level, but managed to demonstrate growth for the sixth session in a row - a sign of stability, despite the negative external background.
Leaders and outsiders: who wins and who loses
Of the 11 key sectors of the S&P index, seven showed growth. The most noticeable strengthening was demonstrated by companies from the sectors of healthcare, consumer goods, industry, materials and utilities.
But the energy sector was the main loser of the day, suffering the greatest losses. Shares of companies focused on consumer goods of increased demand also did not perform well.
Stock indices: cautious growth amid nervousness
Despite pressure from debt risks and economic uncertainty, leading US stock indices ended the session with a slight, but still positive gain:
- The Dow Jones Industrial Average added 137.33 points (+0.32%) to 42,792.07;
- The S&P 500 rose 5.22 points (+0.09%) to close at 5,963.60;
- The Nasdaq Composite rose 4.36 points (+0.02%) to close at 19,215.46.
Debt pressure: markets watch government finances
The yield on 10-year US Treasury notes rose slightly, by one basis point to 4.449%. Investors are concerned that the new tax bill could add to the country's already hefty debt burden. The bill, pushed by former President Donald Trump, has already passed a key milestone: it was approved by a key congressional committee on Sunday.
Trades, Gains and Losses: The Main Market Moves
TXNM Energy soared 7% after it was announced that it was being acquired by investment company Blackstone. The deal is worth an impressive $11.5 billion and is to be implemented through the investor's infrastructure unit.
Biotech in the Crosshairs
Novavax shares soared 15% after the company received official approval from U.S. regulators for its COVID-19 vaccine, an event that the market has been eagerly awaiting for a long time.
Pharmaceutical Mergers
Regeneron Pharmaceuticals gained 0.4% on the news that it is buying bankrupt genetics company 23andMe Holdings. The $256 million deal will be completed through a bankruptcy auction, a highly unusual but strategically advantageous move.
NYSE Balance Sheet: The Market Is Waiting
The mood on the New York Stock Exchange was balanced, with the number of declining stocks barely outpacing the number of rising ones. At the same time, 216 new highs and 50 new lows were recorded, a sign that the market is in a cautious observation phase rather than panic.
European Stock Exchanges: Cautious Optimism Amid Tariff Uncertainty
European stock markets showed moderate growth on Tuesday. Investors showed restrained interest in stocks, preferring companies with stable demand, especially in the utilities and telecommunications sector. The main topic of the day was possible changes in the US tariff policy, which could affect the global economy.
The STOXX 600 index, which tracks stocks across Europe, added 0.2% to settle at its highest in seven weeks, a sign that the market remains hopeful even after the recent jolt caused by the U.S. credit rating downgrade.
Green Signal for Energy: Stocks Soar
Utility companies were at the forefront of the gains. Their shares as a whole rose 1.1%, showing that investors are seeking stable havens amid uncertainty. Portugal's EDP Renovaveis was a particular standout, rising 3.5% after Deutsche Bank analysts revised their forecast from hold to buy.
Wind Profits: Renewables on the Rise
The real surprise came from clean energy companies. Oersted soared 13.3%, while Vestas Wind added 4%. The sharp rise came after Donald Trump's White House lifted an earlier ban on building a major wind farm off the coast of New York. The news sparked a rush of investment into the green sector.
Markets recover from Moody's blow
The downgrade of the US credit rating by Moody's at the end of last week has not yet caused panic in Europe. On the contrary, the markets are showing signs of stabilization. However, investors remain wary - it is possible that new tariff measures expected in July will aggravate the situation again.
Losses and victories: corporate swings of the day
Norwegian salmon farming company Salmar was among the outsiders. Its shares fell by 4% after its quarterly report disappointed investors - operating profit was lower than analysts' forecasts.
British retail pleases
Meanwhile, the British market was invigorated. Shares of fast food chain Greggs, as well as Upper Crust owner SSP Group, and distributor Diploma added from 3.7% to 14.5%. The reason is the encouraging financial results published by these companies, which exceeded expectations and restored faith in the resilience of the UK consumer sector.
