S&P 500 Recovers After Moody’s U.S. Credit Downgrade

The S&P 500 closed modestly higher on Monday, rebounding from early losses as investors stepped in after Moody's cut the U.S. sovereign rating to Aa1. Despite renewed concerns over the $36 trillion debt load and a looming tax-cut bill, bargain hunters helped equities claw back ground.

Market Moves and Sector Highlights

The Dow Jones Industrial Average added 137 points (0.1%), while the S&P 500 finished flat to up 0.1%. The Nasdaq Composite eked out a 0.02% gain, led by strength in defensive sectors and health care names. Retailer Walmart (WMT) was among the laggards, sliding after President Trump urged it to “eat” tariff costs rather than pass them on to consumers.

Energy and utilities outperformed on safe-haven flows, while rate-sensitive financials underperformed as Treasury yields rose on downgrade-driven selling.

Moody's Downgrade and Policy Risks

Moody's cited growing debt and the potential $3-5 trillion impact of the Trump tax bill over ten years. Treasury Secretary Janet Yellen downplayed the move as a “lagging indicator,” but higher yields (2-year and 10-year spreads) briefly weighed on rate-sensitive sectors.

Investors can track upcoming policy votes—including the U.S. House's consideration of the tax legislation—via FMP's Economics Calendar API, which aggregates event times, speaker lineups, and vote schedules in real time (Economics Calendar API).

Intraday Breadth and Liquidity

Real-time turnover data shows a modest tilt toward declining issues, but with several large-cap names attracting heavy volume. Traders looking to identify the most actively traded equities and manage execution risk can leverage FMP's Market - Most Active API for minute-by-minute liquidity rankings across U.S. stocks (Market - Most Active API).

Upcoming Catalysts

• Tax Bill Vote: Congressional approval could trigger renewed volatility around projected fiscal deficits.

• Fed Speeches: Watch comments from Fed officials later this week for clues on the policy response to credit-rating changes.

• Earnings Season Kickoff: Alcoa reports on Thursday—marking the unofficial start of Q2 earnings that may shift sector leadership.

Actionable Takeaways

• Defensive Tilt: Consider adding utilities or consumer staples to weather potential rate-driven swings.

• Event-Driven Alerts: Align equity exposures with economic-calendar reminders for policy votes and Fed commentary.

• Volume Analysis: Use live Most Active data to time entries and exits around headline-driven surges.