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- Stocks slump after US credit rating downgrade (thehill.com)
Stocks opened lower Monday following the first-ever downgrade of U.S. government debt by Moody’s Investor Services. The Dow Jones Industrial Average dropped 217 points (0.6%), while the S&P 500 and Nasdaq composite declined 1% and 1.3%, respectively.
Moody’s lowered the U.S. credit rating from AAA to AA, citing growing government debt and interest payments that are significantly higher than other countries with similar ratings. The agency issued the downgrade after Friday’s closing bell, adding to investor concerns already fueled by rising bond yields.
The downgrade comes as House Republicans advance a bill extending the 2017 tax cuts and adding further deductions. Economists project this legislation will add trillions to the national debt, which currently exceeds $36 trillion.
With rising interest rates increasing the cost of borrowing, the national debt is expected to climb even more rapidly. Both Democrats and Republicans have blamed each other for the escalating debt, but neither party has taken substantial action to address the issue in recent years.
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- Stocks slump after US credit rating downgrade (thehill.com)