CNBC Business News Update Market Open: Stocks Lower on Moody's Downgrade Of US Credit, Bond Yields Higher, Tax Bill Would Increase Deficit 5/19/25
May 19, 2025
Wall Street takes a hit as Moody's downgrades the U.S. credit rating, causing major stocks like Apple to plummet. Bond yields are on the rise, raising concerns about the economy and the federal deficit. The discussion also touches on how retail might be affected by tariffs and job cuts, alongside a quirky mention of ice cream recalls for safety. Plus, there’s a nod to cryptocurrency trends and a shout-out to The Home Depot!
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Moody's Downgrade Impacts Markets
- The US credit rating downgrade by Moody's is the last among major agencies and affects market sentiment negatively.
- This downgrade contributes to falling stock indices and rising bond yields, signaling investor caution.
Tax Bill's Huge Costs and Timing
- The new tax bill is far more expensive than initially expected, with costs potentially reaching $5 to $7 trillion.
- Front-loaded tax provisions boost fiscal stimulus now, while cuts later increase long-term costs.
Treasury Reacts and Tariff Effects
- Treasury Secretary Besson dismissed Moody's downgrade as lagging, indicating skepticism toward credit ratings.
- Tariffs may cause price rises at major retailers, but Walmart might absorb some costs, partially shielding consumers.