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US Stocks End Higher Despite Moody's Downgrade and Poor Consumer Outlook

Strategic Insights

— 1 min read

US stocks closed higher on Monday despite a negative outlook from Moody's and a decline in consumer confidence, according to the Conference Board's leading economic index, which tumbled by 1.0% in April. The Moody's downgrade of the US credit rating to Aa1 from Aaa reflected the increase in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns. Despite this, Regeneron agreed to purchase bankrupt genomics firm 23andMe for $256 million, while Nvidia Corp unveiled its new NVLink Fusion silicon and launched DGX Spark and DGX Station personal AI supercomputers.

Key Takeaways:

  • Moody's downgraded the US credit rating to Aa1 from Aaa, citing the increase in government debt and interest payment ratios.
  • The Conference Board's leading economic index tumbled by 1.0% in April, despite a 0.1% rise in the coincident economic index.
  • Regeneron agreed to purchase bankrupt genomics firm 23andMe for $256 million, and will continue all consumer genome services uninterrupted.
  • Nvidia Corp unveiled its new NVLink Fusion silicon and launched DGX Spark and DGX Station personal AI supercomputers in collaboration with global system builders.
  • Advanced Micro Devices (AMD) agreed to sell its ZT Systems data centre infrastructure manufacturing business to Sanmina Corp for $3 billion in cash and stock.
  • Airbnb shares slid after the Spanish government ordered the company to block more than 65,000 holiday listings due to rule violations.
  • Brent crude oil prices fell to $64.65 a barrel, down from $65.34 on Friday.

Statistics:

  • The Dow Jones Industrial Average closed up 137.33 points, 0.3%, at 42,792.07.
  • The S&P 500 rose 5.22 points, 0.1%, to 5,963.60.
  • The Nasdaq Composite closed up 4.36 points, up marginally, at 19,215.46.
  • The Conference Board's leading economic index fell by 1.0% in April.
  • The coincident economic index rose by 0.1% in April.
  • The lagging economic index rose by 0.3% in April.
  • Moody's downgraded the US credit rating to Aa1 from Aaa, citing an 21-notch rating scale.
  • The pound traded at USD1.3354 late Monday, up from USD1.3282 at the New York close on Friday.
  • The euro rose to USD1.1237 from USD1.1155.

Sources:

  • Alliance News Ltd.
  • Moody's Ratings
  • Conference Board
  • BMO Capital Markets
  • Brown Brothers Harriman
  • Regeneron
  • Nvidia Corp
  • Advanced Micro Devices (AMD)
  • Airbnb
  • Spanish consumer rights ministry
  • Brent crude oil prices

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