Stocks slumped at the open of trading on Monday after a downgrade of U.S. credit triggered a spike in debt yields that threatened to raise borrowing costs throughout the nation's economy. The Dow Jones Industrial Average dropped 295 points, or 0.7%, while the S &P 500 fell 0.9%. The tech-heavy Nasdaq plunged 1.2%.

Stocks end higher, despite Moody’s warning on debt Copyright 2025 The Associated Press. All Rights Reserved.

For a minute there, it looked like the “Sell America” trade was poised to make a comeback on Monday after Moody’s decided to strip the U.S. of its top-tier credit rating late Friday.

US stocks managed to eke out gains on Monday as bond yields eased off bigger gains and Wall Street largely shrugged off Moody's downgrade of the US credit rating. Meanwhile, investors digested developments in President Trump's tariff salvos.

Investors will get the first chance to react to Moody’s downgrade of the U.S. credit rating late Friday over rising government debt and they’ll also look for more progress from President Trump on trade deals as the week kicks off.

A dip in the stock market caused by the Moody’s downgrade of the U.S. debt should be bought, according to a once-pessimistic and now seemingly bullish strategist.

U.S. stocks closed higher after an unsurprising US credit rating downgrade. Treasury yields rise. S&P 500 extends winning streak to six days.