After Moody’s Ratings stripped the US government of its top credit rating late Friday, markets started the new week off by sending the 30-year Treasury yield above 5% — a signal investors are worried about the country’s debt and the trade war. In echoes of the “Sell America” fervor that swept global markets last month, futures for the S&P 500 and Nasdaq 100 fell, the dollar weakened and gold strengthened.
Moody’s move was expected by many — the federal budget deficit is running near $2 trillion a year, or more than 6% of GDP. The ratings firm blamed successive presidents and congressional lawmakers for a ballooning budget deficit it said showed little sign of narrowing. But the downgrade risks reinforcing Wall Street’s growing worries over the US sovereign bond market as President Donald Trump renegotiates trade deals and upends established partnerships. On Sunday night, a key House committee advanced Trump’s giant tax and spending package after Republican hardliners won agreement from party leaders to speed up cuts to Medicaid health coverage, with deficit worries boosting the drive to slash government spending.
China’s factory output showed resilience during the height of Trump’s tariffs. Industrial output climbed 6.1% on year in April, slowing from the prior month but far exceeding the median estimate in a Bloomberg survey of analysts. That said, weaker consumption points to the need for more supportive policies as economists warn of complacency after a 90-day pause on tariffs. China’s prolonged property crisis, deflationary pressure and worries about unemployment are weighing on confidence among households.
EU and UK negotiators reached a deal to strengthen their relationship ahead of a summit Monday, according to two people familiar with the discussions. The two sides settled on a text at around 2 a.m. local time, though the draft still needs to be approved by political leaders on both sides, the people said. The agreement includes three texts: a defense and security partnership, a joint statement on working together on geopolitical challenges, such as Russia’s war in Ukraine, and a “common understanding” on a range of other issues. The two sides had been haggling into the early hours of Monday over fishing rights, food and agricultural standards, and mobility for young people.
Nvidia unveiled new technologies aimed at sustaining the boom in AI computing. CEO Jensen Huang kicked off Computex, Asia’s biggest tech show, in Taiwan by touting new products. Huang opened with an update on timing for Nvidia’s next-generation GB300 systems — an upgrade on the current top-of-the-line Grace Blackwell AI systems — which he said are coming in the third quarter. Separately, Xiaomi said it it plans to invest about $7 billion to develop its own chip over a decade.
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