Stocks and U.S. government bond prices at first fell sharply early in Monday’s trading, but they trimmed their losses as the day progressed. The S&P 500 went from a loss of 1.1% to a modest gain of 0.2% before drifting through the afternoon.

Moody’s has downgraded the US’ credit rating months after US President Donald Trump was sworn in for a second term. It comes as the United States has been witnessing financial and economic uncertainty over Trump’s trade policies.

Treasury Secretary Scott Bessent downplayed the U.S. credit downgrade as a "lagging indicator" of economic and fiscal conditions, after Moody's took the U.S. off its top tier.

The decision could impact financial markets, raise interest rates, and highlight fiscal challenges for the U.S. government.

Moody's downgrade of the U.S. sovereign credit rating has elicited mixed responses among Republicans in Congress, with some questioning the motive behind the change and others depicting it as a warning that lawmakers should heed as they wrestle with a sweeping tax and budget bill.

Investors will get the first chance to react to Moody’s downgrade of the U.S. credit rating late Friday over rising government debt and they’ll also look for more progress from President Trump on trade deals as the week kicks off.