US close: Stocks erase losses as bond yields ease
By Benjamin Chiou
Date: Monday 19 May 2025
(Sharecast News) - US stock markets shrugged off a shaky start to finish marginally higher on Monday despite concerns surrounding the impact of a downgrade of the creditworthiness of America's debt.
The late rally came as US bond yields eased, following a strong surge earlier in the session. The yield on a 10-year US Treasury was down 3 basis points at 4.454% by the close on Wall Street, having jumped 8.2bp to a high of 4.566% when stock markets opened.
As a result, the Dow finished 0.3% higher, the S&P 500 gained 0.1% while the Nasdaq finished broadly flat, with all three indices opening firmly in the red. For the S&P 500 in particular, this was the index's fifth straight day in positive territory.
Tax bills and credit ratings
Some market participants said that sentiment was being supported by the news that President Trump's tax bill was approved by the House Budget Committee on Sunday. This was the bill's key first hurdle, though the proposed tax cuts still remain months away from becoming a reality.
Making headlines on Monday was Moody's decision to cut its rating on US government debt from the highest rating Aaa to Aa1 as a result of the country's eye-watering $36trn debt pile and growing interest costs. The downgrade means that none of the three major credit ratings agencies now rate US debt as the highest quality.
"Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues. As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly," Moody's said.
Speaking on Monday, the head of the Federal Reserve Bank of Atlanta said that the Moody's downgrade complicates the outlook for inflation in the US. "These things will potentially have implications on prices down the road that we're going to have to pay attention to," said Raphael Bostic.
Also in focus were comments from Treasury secretary Scott Bessent who warned that the US could once again lift trade tariffs on some countries if they fail to meet at the negotiating table "in good faith". His warning came after the president announced on Friday that the administration would be sending letters to some 150 trading partner countries "telling people what they will be paying to do business in the United States".
Market movers
Walmart was continuing to decline after Doug McMillon - who last week warned consumers that they would face higher prices at the till because of Trump's trade tariffs - said the retailer would try to absorb some of the impact. Trump said at the weekend that Walmart should "eat the tariffs".
Tesla was under pressure with Xiaomi expected to unveil plans later this week for a new Yu7 SUV - a model widely seen as a challenger to Tesla's Model Y.
Meanwhile, Reddit was hit by a Wells Fargo downgrade to 'equal weight', while Netflix was weighed down by a ratings cut by JPMorgan to 'neutral'.
Shares in TXNM Energy were on the rise after Blackstone Infrastructure announced plans to buy the New Mexico-based electricity provider for $11.5bn.
Dow Jones - Risers
Unitedhealth Group Inc. (UNH) $315.89 8.21%
Merck & Co. Inc. (MRK) $77.23 1.54%
Amgen Inc. (AMGN) $275.85 1.26%
Microsoft Corp. (MSFT) $458.87 1.01%
Procter & Gamble Co. (PG) $164.77 0.91%
McDonald's Corp. (MCD) $321.23 0.82%
Johnson & Johnson (JNJ) $152.49 0.77%
Visa Inc. (V) $367.90 0.76%
Verizon Communications Inc. (VZ) $44.31 0.73%
3M Co. (MMM) $154.14 0.67%
Dow Jones - Fallers
Chevron Corp. (CVX) $138.49 -2.54%
Nike Inc. (NKE) $62.08 -1.63%
Intel Corp. (INTC) $21.38 -1.29%
Salesforce.Com Inc. (CRM) $287.63 -1.21%
Apple Inc. (AAPL) $208.78 -1.17%
Goldman Sachs Group Inc. (GS) $612.30 -1.09%
JP Morgan Chase & Co. (JPM) $264.88 -1.00%
Walt Disney Co. (DIS) $112.66 -0.67%
Home Depot Inc. (HD) $379.38 -0.37%
Walgreens Boots Alliance, Inc. (WBA) $11.25 -0.35%
S&P 500 - Risers
Unitedhealth Group Inc. (UNH) $315.89 8.21%
Dollar General Corp (DG) $98.18 4.95%
Humana Inc. (HUM) $247.34 3.94%
Gilead Sciences Inc. (GILD) $106.16 3.57%
Take-Two Interactive Software Inc. (TTWO) $234.66 3.49%
Biogen Inc (BIIB) $129.44 3.07%
Harley-Davidson Inc. (HOG) $25.35 2.59%
AutoZone Inc. (AZO) $3,879.97 2.47%
NiSource Inc. (NI) $39.92 2.15%
Gap Inc. (GAP) $27.96 2.08%
S&P 500 - Fallers
Helmerich & Payne Inc. (HP) $16.82 -5.51%
AES Corp. (AES) $11.71 -4.10%
Leggett & Platt Inc. (LEG) $9.25 -3.14%
VF Corp. (VFC) $14.32 -3.11%
Best Buy Co. Inc. (BBY) $71.60 -2.98%
CenturyLink Inc. (LUMN) $3.98 -2.93%
Phillips 66 Common Stock (PSX) $122.18 -2.82%
Jefferies Financial Group Inc. (JEF) $51.31 -2.64%
Chevron Corp. (CVX) $138.49 -2.54%
Under Armour Inc. Class A (UAA) $6.55 -2.38%
Nasdaq 100 - Risers
Gilead Sciences Inc. (GILD) $106.16 3.57%
Take-Two Interactive Software Inc. (TTWO) $234.66 3.49%
Trip.com Group Limited (TCOM) $67.10 3.28%
Biogen Inc (BIIB) $129.44 3.07%
Vodafone Group Plc ADS (VOD) $9.64 2.01%
Verisk Analytics Inc. (VRSK) $314.35 1.54%
Fiserv Inc. (FI) $169.14 1.49%
Western Digital Corp. (WDC) $50.72 1.46%
Hasbro Inc (HAS) $68.18 1.44%
Paychex Inc. (PAYX) $158.19 1.42%
Nasdaq 100 - Fallers
Tesla Inc (TSLA) $342.09 -2.25%
Charter Communications Inc. (CHTR) $418.63 -2.02%
Align Technology Inc. (ALGN) $184.84 -1.83%
Intel Corp. (INTC) $21.38 -1.29%
J.B. Hunt Transport Services Inc. (JBHT) $146.24 -1.22%
Apple Inc. (AAPL) $208.78 -1.17%
Sirius XM Holdings Inc (SIRI) $22.47 -1.14%
Analog Devices Inc. (ADI) $224.54 -1.13%
Starbucks Corp. (SBUX) $84.61 -1.12%
Gen Digital Inc. (GEN) $28.49 -1.11%
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