Global markets tumble as Moody’s downgrades US credit rating amid rising debt concerns

Global stock markets slid Monday following a downgrade of the United States' sovereign credit rating by Moody’s Ratings, which cited Washington’s continued failure to rein in rising debt.The news also weighed on US futures and the dollar.The future for the S&P 500 dropped 1.2 per cent, while that for the Dow Jones Industrial Average fell 0.8 per cent. The US dollar weakened to 144.92 Japanese yen from 145.65 yen. Meanwhile, the euro climbed to $1.1254 from $1.1183, AP reported.Bond yields moved higher, with the yield on the 10-year US Treasury rising to about 4.54 per cent, up from 4.44 per cent late Friday.In Europe, Germany’s DAX dipped 0.1 per cent to 23,733.96 and the CAC 40 in Paris fell 0.5 per cent to 7,851.46. The FTSE 100 in London also declined 0.5 per cent to 8,643.23.Asian markets followed suit. China’s indexes slipped after official data showed retail sales in April rose 5.1 per cent from a year earlier—less than expected—while growth in industrial output slowed to 6.1 per cent from March’s 7.7 per cent.The figures raised concerns that inventory may build up as production continues to outpace demand. Analysts also pointed to the impact of pre-tariff shipping activity linked to US President Donald Trump's trade policies.“After an improvement in March, China’s economy looks to have slowed again last month, with firms and households turning more cautious due to the trade war,” Julian Evans-Pritchard of Capital Economics said in a report.Hong Kong's Hang Seng lost 0.1 per cent to 23,332.72, while the Shanghai Composite Index was nearly flat at 3,367.58. Shares of e-commerce giant Alibaba tumbled 3.4 per cent after reports emerged that US officials are reviewing a possible Apple-Alibaba partnership aimed at integrating AI into iPhones sold in China.Elsewhere in Asia, Tokyo’s Nikkei 225 fell 0.7 per cent to 37,498.63, South Korea’s Kospi slid 0.9 per cent to 2,603.43, Australia’s S&P/ASX 200 dropped 0.6 per cent to 8,295.10, and Taiwan’s Taiex shed 1.5 per cent.Oil prices also weakened in early Monday trading. US benchmark crude fell 47 cents to $61.50 per barrel, while Brent crude slipped 50 cents to $64.91 per barrel.The sell-off followed a strong week on Wall Street, where stocks had been climbing back toward record highs. The S&P 500 rose 0.7 per cent last week and is now within 3 per cent of its all-time peak set in February, having bounced back from a brief 20 per cent slide.Market optimism had been supported by speculation that Trump might ease tariffs after securing trade deals, helping reduce fears of a recession and runaway inflation.The Dow Jones Industrial Average gained 0.8 per cent last week and the Nasdaq composite added 0.5 per cent.Trump’s trade war had previously rattled markets, stoking fears of economic slowdown and inflation spikes.However, sentiment improved after the US and China agreed to a 90-day pause on further tariffs, and US inflation data came in better than expected.Despite that, the mood remains cautious. Consumer sentiment weakened again in May, according to a University of Michigan survey, though the decline was less severe than in previous months.Among individual stocks, Charter Communications rose 1.8 per cent after announcing a merger deal with Cox Communications, potentially uniting two of the nation's largest cable providers.Investors are hoping that easing inflation signals might give the Federal Reserve room to cut interest rates later in the year if tariffs continue to pressure the economy.