Stocks Mixed, Treasury Bonds Slip On Moody's US Downgrade: What's Driving Markets Monday?

U.S. stocks trimmed early-session losses by midday Monday, as investors showed limited concern after Moody’s downgraded U.S. sovereign credit from Aaa to Aa1, effectively stripping the world’s largest economy of its last top-tier credit rating.

The S&P 500 index hovered near Friday’s close. A green end to the session would mark the sixth consecutive daily gain. The Nasdaq 100 also traded flat, while the Dow Jones Industrial Average outperformed, and small caps lagged.

Bond markets initially reacted sharply, with 30-year Treasury yields spiking above 5% following the downgrade. Yet, buying interest emerged during the session, pulling yields back to 4.95%. The iShares 20+ Year Treasury Bond ETF TLT still was down 0.6% on the day.

The U.S. dollar index (DXY) weakened 0.6% to 100.40, reflecting moderate selling pressure on the greenback. Sector performance was muted overall, except for energy, which fell 1.5%. Crude oil slipped 0.4%, while natural gas dropped 6% amid oversupply concerns.

Gold rose 1% to $3,235 per ounce, supported by safe-haven flows. Bitcoin BTC/USD rallied 2%, climbing above the $105,000 mark.

Monday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY inched 0.1% up to $594.91.
• The SPDR Dow Jones Industrial Average DIA rose 0.4% to $428.18.
• The tech-heavy Invesco QQQ Trust Series QQQ edged 0.1% higher to $522.01.
• The iShares Russell 2000 ETF IWM fell 0.5% to $208.80.
• The Health Care Select Sector SPDR Fund XLV outperformed, up 0.7%; the Energy Select Sector SPDR Fund XLE lagged, down 1.5%.

Monday’s Stock Movers

• UnitedHealth Group Inc. UNH jumped 8%, extending Friday’s 6% surge, after several company executives bought shares during the recent selloff.
• New Fortress Energy Inc. NFE rallied 21%, following a nearly 60% decline last week amid lower-than-expected earnings.
• Novavax Inc. NVAX surged 18% after the FDA approved its Nuvaxovid COVID-19 vaccine for high-risk individuals, including seniors over 65 and those aged 12–64 with underlying health conditions. Shares of Moderna Inc. MRNA rose 6.4%.

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