1. Moody’s Downgrades U.S.
Last Friday, Moody’s cut the U.S. sovereign credit rating from AAA. This was the last remaining AAA rating for the U.S. Moody’s said: “Successive governments and Congress have failed to agree on ways to fix the large yearly deficits and rising interest costs.”
2. Markets Fell Early, Rebounded Late
The downgrade set a weak tone for the new week. U.S. stocks opened lower on Monday. But markets recovered through the day. By the close, the Dow, S&P 500, and Nasdaq all posted small gains. This showed some resilience.
3. Should We Worry About the Downgrade?
History says—don’t panic. Past downgrades had limited impact on U.S. bonds. U.S. Treasuries are still seen as the world’s safest and most liquid assets.
From a technical view, bond ETF TLT is quietly entering a mid-term uptrend. Pullbacks may be buying opportunities.
Summary
In the short term, markets reacted calmly to the downgrade. But deeper risks are building—rising debt costs, big deficits, global trade tensions. These may slowly affect the real economy.
Investors should look beyond headlines and watch for slow-moving risks that shape economic trends.
May 20
QQQ likely trading range: 518.3 to 525.7.
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