Markets Eyed for Moody’s Downgrade Fallout and Policy Catalysts

Monday's drop in Treasury yields and Moody's cut of U.S. credit to Aa1 set a cautious tone for the week, with investors now tracking five key developments.

1. Bessent on Moody's Downgrade
Treasury Secretary Scott Bessent dismissed the Moody's move as a “lagging indicator” on NBC's Meet the Press, noting that the $36.2 trillion debt load and recurring deficits prompted the agency's decision. While yields ticked higher on Friday, Washington insists fiscal measures are in hand.

2. Tax Bill Vote in the House
Republicans are racing to pass President Trump's $3-5 trillion tax package before May 26, after a key committee cleared the measure. Traders can keep the vote schedule front of mind using FMP's Economics Calendar API, which lists upcoming floor votes, committee hearings, and fiscal deadlines.

3. Retail Earnings Spotlight Tariffs
Home Depot and Target join Walmart this week in reporting Q2 results. With Walmart already warning of tariff-driven price hikes, these earnings will reveal how broad the impact is on consumer prices. You can track release dates and earnings calls via FMP's Earnings Calendar API.

4. PMI and China's April Data
S&P Global's flash U.S. PMI for May—last seen at 50.6 in April—will indicate whether U.S. business activity is stalling under higher borrowing costs. Meanwhile, China's factory output beat forecasts at 6.1% YoY, but retail sales cooled to 5.1%, underscoring mixed demand and justifying PBOC stimulus chatter.

5. JPMorgan Investor Day
CEO Jamie Dimon is expected to address the tariff outlook and its implications for global banking at JPMorgan's investor day. Given the market sensitivity to trade-policy shifts, his commentary could drive notable moves in financial stocks and bond yields.

Action Points:

• Stay Informed on Policy Dates: Use the Economics Calendar API to schedule alerts around the House vote and Fed speakers.

• Analyze Earnings for Tariff Signals: Compare retailer margin guidance across reports to gauge the inflation pass-through.

• Monitor PMI vs. Bond Yields: Divergences between flash PMI prints and rising yields may signal broader growth concerns.