U.S. stocks cut early losses on Monday as investors largely raised concerns about the growing debt problems of the U.S. government.

The S&P 500 fell by about 0.3% in recent trading after a 1% decline in openings. Nasdaq High Technology has a composite material rate of 0.4%, while the Dow Jones industrial average has dropped by only 0.1%.

The decline on Monday morning comes after Moody's Friday rating was downgraded from AAA (probably the highest rating) to AA1's rating. Moody's is the last major credit agency to lower the U.S. Treasury's rating. Standard and Poor and Fitch did so in 2011 and 2023, respectively.

Moody cites the downgrade of "lasting, big fiscal flaws". "We believe that mandatory spending and multi-year reductions in deficits will be due to fiscal proposals currently under consideration," the agency wrote. The U.S. financial situation is likely to worsen as the government's debt and interest burden increases.

The downgrade rattles briefly. The 10-year Treasury yield surged to a three-month high of 4.57%, retreating to about 4.51%, while the dollar lowered most major currencies.

"Moody's downgrade of U.S. debt does not tell investors that they know nothing about the U.S. fiscal difficulties," Bank of America analysts wrote in a note on Monday. BOFA analysts do not want the downgrade to have a big impact on the U.S. treasury market because it does not exclude U.S. debt from the main fixed income index.

Oppenheimer analysts also pointed out on Monday that a downgrade is unlikely to plunge into the Treasury or the stock market. The downgrades from S&P and Fitch caused anxiety on Wall Street early on, but did not end up causing significant damage to the debt market due to the “depth and breadth of accountability and the relatively high transparency of governance” in the United States. ”

Oppenheimer analysts remain optimistic about the stock market outlook and note that “any recent tension about downgrades may be exaggerated.” They recommend “looking for babies abandoned by bathing water” rather than extensively ‘buying dips’”, considering the rising uncertainty.

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