US markets inched forward on Monday, shaking off early losses after Moody’s downgraded the nation’s credit rating. The S&P 500 notched a sixth straight win, rising just 0.09% to close at 5,963.60, while the Nasdaq finished nearly flat. The Dow fared better, gaining 137 points—buoyed by an 8% rebound in UnitedHealth after heavy selling last week.
The downgrade, which brought Moody’s rating in line with other agencies, cited long-term fiscal risks tied to America’s growing deficit and rising refinancing costs. Treasury yields spiked early in the session, with the 30-year breaching 5% and the 10-year topping 4.5%, before easing later in the day.
Tariff risks keep investors on edge
While markets regained their footing, many traders remain cautious as the full impact of President Trump’s sweeping tariff policy has yet to filter through the economy. Analysts warn that tariffs could push up prices and compress corporate margins. Already, some firms are revising guidance downward, with expectations for S&P 500 earnings growth falling toward zero by year-end.
Europe strikes post-Brexit reset
Meanwhile in London, the UK and EU unveiled a major agreement to reset post-Brexit relations, easing trade restrictions and boosting defence cooperation. The deal is expected to add billions to the UK economy, though it drew backlash from some political quarters over fishing rights and regulatory alignment.
Capitol Hill wrangling over Trump’s tax bill
And in Washington, Republicans advanced Trump’s 1,100-page tax and spending bill through committee in a razor-thin Sunday vote. The legislation proposes sweeping tax cuts, Medicaid work requirements, and the rollback of clean energy credits—but faces stiff opposition from both ends of the political spectrum. A full House vote is expected later this week.
Commodities and the dollar
WTI crude is trading 0.32% higher at US$62.69 a barrel.
Brent crude is trading 0.12% higher at US$65.49 a barrel.
Spot gold is trading flat at US$3,229.61 an ounce.
Gold futures (COMEX) are trading 1.45% higher at US$3,233.50 an ounce.
One Australian dollar is buying 64.58 US cents.
Australia eyes rate cut
Locally, Australian markets are focused on the Reserve Bank’s upcoming interest rate decision. Economists widely expect a 25-basis-point cut, which would push the cash rate below 4% for the first time since 2023. The ASX is poised to rise, with the SPI futures pointing to a 73 point lift, taking cues from a resilient Wall Street close and anticipation of looser monetary policy.
