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U.S. stocks saw minimal movement on Monday as investors assessed the impact of Moody’s Ratings downgrading the U.S. credit rating and the advancement of a tax bill projected to significantly increase federal deficits. The trading session reflected caution amid these developments.

U.S. Stock Performance at a Glance

The S&P 500 extended its winning streak with a slight gain, while the Nasdaq Composite edged up by just 0.01%. The Dow Jones Industrial Average rose 0.3%, buoyed by a recovery in UnitedHealth Group shares. This performance highlights mixed investor sentiment amidst fiscal and economic concerns.

Moody’s Downgrades U.S. Credit Rating

Moody’s Ratings announced late Friday that it had downgraded U.S. debt to AA1, citing “persistent, large fiscal deficits” and higher borrowing costs. This marks the loss of the U.S.’s last triple-A credit rating, sparking concerns over the country’s fiscal sustainability.

Tax Bill Sparks Deficit Concerns

Adding to market unease, the House Budget Committee advanced a tax-and-spending plan from the administration, which includes extending tax cuts and increasing spending. Analysts have raised alarms about its potential to significantly inflate deficit projections, further straining federal finances.

Bond and Currency Market Reactions

The 10-year Treasury yield briefly surged to 4.56%, its highest in over a month, before retreating to 4.46%. Meanwhile, 30-year Treasury yields touched 5% before settling near 4.95%. In currency markets, the dollar index fell 0.7%, reflecting subdued confidence in the U.S. economy. Gold prices, often viewed as a safe-haven asset, jumped 1.5%, reaching $3,235 per ounce.

Mixed Results in Tech Stocks

Technology stocks, which have been a driving force behind recent market rallies, delivered mixed results. Tesla dropped 2% after last week’s impressive 17% rally. Other tech giants like Apple, Nvidia, Alphabet, and Meta also saw declines. On the other hand, Microsoft and Amazon recorded modest gains.

Bitcoin Surges Amid Market Fluctuations

In the cryptocurrency market, Bitcoin surged to $105,400, marking a 1.25% increase. This rally also lifted shares of Strategy by 3%. However, other companies like Palantir, AMD, and Super Micro Computer saw declines of over 2%, reflecting broader volatility in the tech sector.

JPMorgan CEO Weighs In on Economic Outlook

JPMorgan CEO Jamie Dimon expressed caution, noting that the full economic impact of tariffs had yet to be realized. Meanwhile, Federal Reserve officials indicated no immediate changes to interest rates, signaling a wait-and-see approach in light of ongoing economic uncertainty.

Global Markets Show Mixed Trends

Global markets displayed uneven performance. European stocks posted slight gains, while Asian markets experienced losses. The European Union lowered its economic growth outlook, and Diageo forecasted a $150 million impact from tariffs, underscoring global economic challenges.

Stay informed on the latest cryptocurrency and financial market news to make smarter investment decisions. The evolving landscape of finance requires a keen eye on both traditional markets and emerging digital assets like Bitcoin.

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