S&P 500 index drops again after Moody's downgrades US credit rating

The US stock market fell on the news that Moody's downgraded the country's credit rating. The rating dropped from the highest level of AAA to AA1 due to rising government debt and a higher interest burden. This is how the organization explained its decision.

Bloomberg experts are seriously concerned about the economic prospects of the United States. The recovery of the S&P 500 index this month, following a slump in the previous one, did not last long. American shares came under pressure again after the country's credit rating downgrade. Moreover, Moody's was not the only agency that decided to take this step. Fitch Ratings and S&P Global Ratings also revised their indicators downward.

Recent news has increased skepticism in the stock market, Bloomberg notes. According to Eric Beiley of Steward Partners, Wall Street strategists may start taking profits after the latest rise in US stocks. If so, the S&P 500's downward trend could accelerate.

Ivan Feinseth of Tigress Financial Partners believes that the change in the US credit rating will also affect other countries' sovereign debt, as US government bonds were previously considered the world's safest investments.