Wall Street tumbles as rising yields spook investors; UnitedHealth shares crash 5%

Moody’s has cut the U.S. government’s credit rating from AAA to AA1, marking a notable downgrade in the country's financial credibility.

U.S. stocks slid on Wednesday, weighed down by rising Treasury yields and renewed anxiety over fiscal policy developments in Washington. The Dow Jones Industrial Average lost 362 points, or 0.9 percent, while the S&P 500 dropped 0.6 percent. The Nasdaq Composite ended the day 0.7 percent lower.

The sell-off came as yields on long-term government bonds resumed their upward climb. The 30-year Treasury yield pushed past 5 percent again, and the 10-year yield hovered above 4.53 percent—levels that have unsettled markets since Moody’s lowered its outlook on U.S. credit late last week.

Much of the focus now shifts to Capitol Hill, where Republican lawmakers are racing to finalize a new budget proposal. The plan includes tax cuts, but disagreements over state and local tax deductions have delayed progress. Investors are watching closely, worried that the package could swell the federal deficit.

Among individual stocks, UnitedHealth took a beating, plunging over 5 percent after HSBC cut its rating on valuation concerns. Tech giants Apple and Amazon also lost more than 1 percent each, under pressure from the jump in yields.

Target shares dropped 3.5 percent after the retailer missed revenue expectations for the first quarter and lowered its full-year guidance. The company cited a slowdown in discretionary spending, uncertainty around tariffs, and backlash related to recent changes in its diversity and inclusion strategy.

Wednesday’s decline extended the previous day’s losses, snapping a six-day winning streak for the S&P 500 and marking the Nasdaq’s second straight negative session. Still, the broader market remains well off last month’s lows, with the S&P 500 and Nasdaq up more than 14 percent and 19 percent, respectively, over the past four weeks.

The dip in sentiment comes after Moody’s Ratings, on Friday, downgraded the US government’s credit rating by one notch, highlighting deepening concerns over the nation’s fiscal stability.

Moody’s has cut the U.S. government’s credit rating from AAA to AA1, marking a notable downgrade in the country's financial credibility. The move brings the U.S. in line with several other developed nations that carry lower-rated debt profiles.

The decision comes nearly four months after Donald Trump began his second term as President, raising fresh scrutiny over fiscal management in Washington.

Citing persistent challenges in addressing the ballooning national debt, Moody’s flagged the government’s ongoing inability to rein in spending as a primary factor behind the downgrade.