Global markets, U.S. futures and the dollar all retreated early Monday after Moody’s Ratings downgraded the sovereign credit rating for the United States because of its failure to stem a rising tide of debt, according to the Associated Press. Futures for the S&P 500 lost 1.1%, while futures for the Dow Jones Industrial Average fell 0.6%. Nasdaq futures tumbled 1.5%.
Moody’s forecast that federal deficits will widen to almost 9% of the U.S. economy by 2035, up from 6.4% in 2024, driven mostly by higher interest payments on debt, growing entitlement spending and low revenue generation from taxes.
Moody’s said that extending President Donald Trump’s 2017 tax cuts, a priority of the Republican-controlled Congress, would add $4 trillion over the next decade to the federal primary deficit.
Uncertainty tends to make markets uneasy, and that anxiety pushed the U.S. dollar down to 144.96 Japanese yen from 145.65 yen.
In corporate news, Capital One closed its acquisition of Discover, the companies announced Sunday. That deal was announced more than a year ago. Capital One shares dipped a little more than 1% in premarket.
In oil trading early Monday, U.S. benchmark crude oil lost 58 cents to $61.39 per barrel. Brent crude, the international standard, also gave up 58 cents to $64.83 per barrel.
