US stocks decline after credit firm Moody’s downgrades the United States amid Trump tariffs

Donald Trump slammed a top US company for warning its customers of price hikes as a top financial ranking firm slashed America’s credit rating and markets tumbled.

Wall Street stocks fell early on Monday after financial ranking firm Moody’s slashed the United States’ credit rating and markets awaited further action on President Donald Trump’s sweeping tax cut measure.

Monday’s session was the first since Moody’s announced the downgrade, citing rising levels of US government debt and interest payment ratios “to levels that are significantly higher than similarly rated sovereigns.”

About 15 minutes into trading, the Dow Jones Industrial Average was down 0.4 per cent at 42,490.30.

The broadbased S&P 500 declined 0.7 per cent to 5,914.20, while the tech-rich Nasdaq Composite shed 1.0 per cent to 19,027.87.

Specialist Michael Gagliano, left, and trader Timothy Nick work on the floor of the New York Stock Exchange. Picture: AP Photo/Richard Drew

The Moody’s downgrade “probably weighs on markets a bit here this morning,” Art Hogan of B. Riley Wealth Management.

Markets are closely watching Congress, where the full House is expected to vote this week on Trump’s fiscal legislation, which pairs tax reductions with cuts to health coverage for low-income Americans.

A House panel narrowly approved the measure on Sunday.

“The attention of markets has shifted a bit from everything being about trade to everything being about getting a budget passed,” Hogan said. “And in that light, there’s probably a bit of caution coming into a new week.”

Among individual companies, Walmart fell 2.3 per cent after President Trump slammed the company for warning customers of price increases due to his tariffs.

Mr Trump called on the retail giant to “EAT THE TARIFFS” on social media, adding, “I’ll be watching.”

The US dollar slipped and bond yields jumped at the opening of trading, a combination that suggests sentiment is souring on the US economy and the impact of President Trump’s policies on it.

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POPE LEO RECEIVES VANCE, RUBIO AFTER BEING CRITICAL OF TRUMP

Pope Leo XIV received US Vice President JD Vance and US Secretary of State Marco Rubio at the Vatican Monday, ahead of a US-led push to end the Russia-Ukraine conflict.

The Vatican released photographs of Vance and Rubio smiling as they met with the Chicago-born pontiff, who was elected as head of the world’s 1.4 billion Catholics on May 8 -- the first pope from the United States.

Pope Leo XIV meets with Vice President JD Vance, center, and Secretary of State Marco Rubio, left, on the occasion of their meeting at the Vatican, Monday, May 19, 2025. Picture: Vatican Media via AP

VP Vance handed Leo an invitation from US President Donald Trump to visit the White House, his spokeswoman Karoline Leavitt told reporters in Washington, adding that Trump hoped the visit would happen as soon as possible.

US Vice President JD Vance talks to reporters on board of the Air Force Two at Leonardo da Vinci International Airport, in Rome, on May 19, 2025, after attending the inauguration of Pope Leo XIV at the Vatican. Picture: AFP

Mr Vance’s audience with Leo lasted 45 minutes, the VP’s spokesperson said. Before becoming pope, Leo reposted on his personal X account criticism of US President Donald Mr Trump’s administration over its approach to migration and also pilloried Vance.

But VP Vance insisted that the United States was “very proud of him”, adding that “our prayers go with him as he starts this very important work”.

Vance converted to Catholicism in 2019 and Rubio is also a Catholic.

SUPREME COURT LIFTS BAN ON TRUMP DEPORTATIONS

The US Supreme Court has allowed the Trump administration on Monday to end legal protections that have shielded some 350,000 Venezuelans from potential deportation.

The court granted a request by Homeland Security Secretary Kristi Noem to revoke temporary protected status (TPS) for the Venezuelans while an appeal proceeds in a lower court.

A federal judge in California put a temporary stay in March on the Trump administration’s plans to end TPS for the Venezuelan nationals.

Solicitor General John Sauer filed an emergency application with the conservative-majority Supreme Court asking it to stay the judge’s order.

Originally published as US stocks decline after credit firm Moody’s downgrades the United States amid Trump tariffs