Wall Street Ends Flat After Moody’s Downgrades U.S. Credit Rating

U.S. stock markets closed mostly flat on Monday as investor confidence was shaken by Moody’s decision to downgrade the federal government’s credit rating. The agency lowered the rating from “Aaa” to “Aa1” due to the nation’s ballooning $36 trillion debt.

Although stocks dipped earlier in the day, they largely recovered by the close. The S&P 500 edged up for a sixth straight session, gaining 0.09%, while the Dow Jones rose 0.32%. The Nasdaq Composite barely moved, up just 0.02%.

Despite the overall flat close, several sectors performed well—healthcare, consumer staples, industrials, and utilities all saw gains. However, energy and consumer discretionary stocks dragged down the momentum.

Market strategist Talley Leger noted that reactions were expected after Friday’s late downgrade but cautioned against overreacting. “The ‘sell-America’ mood is overdone,” he said.

Meanwhile, bond markets reacted to concerns that President Trump’s proposed tax bill could worsen the debt outlook, pushing 10-year Treasury yields slightly higher to 4.449%.

In stock-specific news:

TXNM Energy surged 7% after being acquired by Blackstone in an $11.5B deal.

Novavax jumped 15% following FDA approval for its COVID-19 vaccine.

Regeneron climbed after announcing the purchase of 23andMe in a $256M bankruptcy auction.

Trading volume was higher than usual, with over 19 billion shares exchanged—above the 20-day average.

With market volatility rising, many are turning to AI-powered strategies like ProPicks, which recently flagged stocks that soared over 150%. Investors are now watching closely to see if Intel (INTC) will join the list of top performers.