Moody's Downgrade Sends Ripples Across Wall Street: Stocks Tumble Amid Debt Concerns

The U.S. stock market faced declines as Wall Street futures dropped and Treasury yields rose following Moody's downgrade of the U.S. sovereign credit rating. Concerns over the country's rising debt spurred the action. Despite the downgrade, experts suggest it may not have a lasting impact on financial markets.

Wall Street opened to a tumultuous start as U.S. stock futures spiraled downward and Treasury yields increased, triggered by a downgrade from Moody's on the U.S. sovereign rating. The credit rating agency adjusted the U.S.'s rating from 'Aaa' to 'Aa1', citing concerns over the ballooning $36 trillion debt ceiling.

Despite the credit rating dip, Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, views it as a headline risk rather than a fundamental market shift. Market volatility was also fueled by approval of President Donald Trump's contentious tax-cut bill, sparking fiscal deficit concerns.

In premarket trading, tech giants bore the brunt, with Tesla and other semiconductor stocks experiencing significant losses. Meanwhile, Netflix shares fell after J.P. Morgan's analyst focus list removal, and TXNM Energy surged following an acquisition announcement by Blackstone's infrastructure unit.

(With inputs from agencies.)