1. US 30-year Treasury yield rose above 5% for the first time since April. 2. Moody's downgraded US credit rating from Aaa to Aa1, increasing market concerns. 3. S&P 500 futures fell more than 1% amid rising yields and uncertainty. 4. Federal debt projected to rise significantly, impacting investors' sentiment. 5. Tax cuts passing Congress expected to further increase US fiscal deficits.
The downgrade of US credit and rising yields typically discourage investment, historically leading to declines in equity markets. Similar past downgrades have resulted in decreased investor confidence and S&P 500 declines.
The credit downgrade and rising yields are highly relevant to the S&P 500 as they indicate increased financial risk and affect investor confidence. Their potential to alter fiscal policy could significantly impact market conditions.
Immediate market reactions to credit downgrades and yields are typically swift, affecting S&P 500 performance in the following days. This situation mirrors negative sentiments from past economic shifts.