That's a Tight Range for Credit Downgrade

Moody’s has officially knocked the U.S. government’s credit rating down a peg—from Aaa to Aa1—citing ballooning debt levels and rising interest payments that outpace other top-rated countries. It’s the third and final major ratings agency to do so, following S&P in 2011 and Fitch last year.

The downgrade comes with a side of political finger-pointing: Moody’s criticized both parties for failing to rein in deficits, while the White House and GOP traded barbs over who’s to blame for the growing debt pile.

Looking ahead, Moody’s expects deficits to keep climbing—up to 9% of GDP by 2035—thanks to entitlement spending, higher interest costs, and modest revenue growth. Still, it upgraded the U.S. outlook from “negative” to “stable,” citing the economy’s size, the dollar’s dominance, and the Fed’s independence.

These headlines will likely grab the market’s attention early on, but beyond that, the calendar is relatively quiet as we head into Memorial Day next week.

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🪓Moody’s downgrades US to AA+ rating: The U.S. just got bumped down a letter in the global credit score yearbook—Moody’s dropped its rating from Aaa to Aa+, blaming political drama and ballooning debt. Basically, Washington’s fiscal habits are looking like a shopping spree with no budget. Investors aren’t panicking yet, but let’s just say it’s not giving "world’s most reliable borrower" vibes. Read more

🗳️ Trump floats China trip to 'straighten out' tariffs: Trump is considering taking his tariff tantrum directly to China, suggesting a trip to “straighten it all out”—because nothing says diplomacy like travel and tension. While he didn’t confirm a visit, he did confirm he’s still ready to throw tariffs around like confetti. Buckle up, global markets, Dad’s thinking about a road trip. Read more

📉 Massachusetts business leaders warn state economy is ‘slipping’: The Massachusetts Chamber of Commerce says the state’s economy is on the struggle bus—citing affordability issues, sluggish job growth, and high housing costs. Translation: it’s getting too expensive to do business and live in the same zip code. Time for a little Bay State economic soul-searching. Read more

💸 ‘Economic fallacy’: Rand Paul doesn’t think tariffs will shrink the deficit: Senator Rand Paul called out the magical thinking behind tariffs fixing the national deficit, basically saying, “That’s not how any of this works.” He warned that hiking prices on American consumers won’t suddenly erase trillions in debt. The only thing shrinking faster than the deficit is patience with bad math. Read more

🛒 Bessent says Walmart price hikes 'worst-case scenario,' Trump urges Walmart to 'eat the tariffs': Treasury Secretary Scott Bessent tried to downplay Walmart’s warnings about higher prices, saying companies always lead with doom and gloom during earnings calls. Trump, never one to mince words, told Walmart to just “eat the tariffs” like it's 2019 all over again. Walmart’s trying to keep prices low while stuck in the middle of a political-economic food fight. Read more

Monday

• U.S. leading economic indicators (April)

• Federal Reserve Vice Chair Philip Jefferson, Atlanta Fed President Raphael Bostic, Dallas Fed President Lorie Logan, and New York Fed President Williams are scheduled to speak

• Trip.com and Ryanair are scheduled to report earnings

• Computex Taipei event continues from start Sunday night U.S. time

Tuesday

• Atlanta Fed President Bostic, San Francisco Fed President Mary Daly, Cleveland Fed President Beth Hammack, and St. Louis Fed President Alberto Musalem are scheduled to speak

• Home Depot, Palo Alto Networks, Keysight Technologies, Viking Holdings, and Toll Brothers are scheduled to report earnings

Wednesday

• Federal Reserve Gov. Bowman and Richmond Fed President Tom Barkin are scheduled to speak

• TJX, Lowe’s, Medtronic. Snowflake, Target, Baidu, Zoom Communications, and XPeng are scheduled to report earnings

Thursday

• Initial jobless claims (Week ending May 17)

• S&P Global flash U.S. Purchasing Managers Index (PMI) (May)

• Existing home sales (April)

• New York Fed President Williams is scheduled to speak

• Intuit, Toronto Dominion Bank, Analog Devices, Workday, Autodesk, Copart, Ross Stores, and Ralph Lauren are scheduled to report earnings

Friday

• New home sales (April)

• Booz Allen Hamilton is scheduled to report earnings

Here’s how the S&P 500 typically acts on a weekly basis.

Click here 👈to learn more about our charts.

Click here 👈to learn more about our charts.

Click here 👈to learn more about our charts.