FILE PHOTO: A man exits the New York Stock Exchange (NYSE) onto Wall Street after the closing bell rings in New York City, U.S., April 7, 2025. REUTERS/Kylie Cooper/File Photo

By Caroline Valetkevitch

NEW YORK (Reuters) -Longer-dated Treasury yields gained while the dollar eased and the S&P 500 edged lower on Monday amid concerns about the U.S. debt load and a tax-cut bill, following Moody's downgrade of the country's sovereign credit rating.

Late on Friday, Moody's Investors Service cut the United States' sovereign credit rating from the top triple-A rank, highlighting the country's deteriorating fiscal outlook.

U.S. President Donald Trump's sprawling tax-cut bill was approved by a key congressional committee on Sunday. Republicans who control the U.S. House of Representatives will try to push the bill toward passage this week.

A screen reflecting on glass displays the Hang Seng stock index at the Central district in Hong Kong, China, April 7, 2025. REUTERS/Tyrone Siu/File Photo

The 30-year Treasury yield hit an 18-month high, with investors concerned that the tax bill will increase the debt load by more than previously expected. The 30-year bond yield touched 5.037%, the highest since November 2023.

"What Moody's did was really more symbolic than anything else. The other agencies had already downgraded the debt," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"Yes, yields are moving higher on the news, and could spike a bit higher. But they are moving up for other reasons as well," he added. "In general the (stock) market is not really reacting all that much to the Moody's announcement. Rather, it's a market that's come up and is looking to perhaps consolidate its recent moves."

FILE PHOTO: The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., March 17, 2025. REUTERS/Kylie Cooper/File Photo

The downgrade from Moody's follows similar moves from Fitch in 2023 and Standard & Poor's in 2011.

U.S. Treasury Secretary Scott Bessent used television interviews on Sunday to dismiss the downgrade, while warning trade partners they would get maximum tariffs if they did not offer deals in "good faith."

Bessent heads to a Group of Seven meeting this week for more talks.

The Dow Jones Industrial Average rose 50.72 points, or 0.12%, to 42,705.46, the S&P 500 fell 10.08 points, or 0.17%, to 5,948.43 and the Nasdaq Composite dropped 54.18 points, or 0.28%, to 19,157.69.

The S&P 500 had registered its fifth straight day of gains on Friday.

MSCI's gauge of stocks across the globe rose 0.13 points, or 0.01%, to 880.75. The pan-European STOXX 600 index rose 0.13%, while Europe's broad FTSEurofirst 300 index rose 2.80 points, or 0.13%.

MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.5%.

A mixed bag of Chinese data showed a struggling economy.

Trump's tariff war has sapped consumer sentiment, and analysts will be scouring earnings from Home Depot and Target this week for an update on spending trends. Home Depot is due to report on Tuesday before the opening bell.

Trump said on Saturday that Walmart should "eat the tariffs" after the world's largest retailer said it would have to start raising prices due to the levies.

The dollar weakened broadly, hitting a more than one-week low against the safe-haven yen, Swiss franc and euro. Against the Japanese yen, the dollar was down 0.49% at 144.91.

U.S. RATES NOT FALLING SO FAST

Atlanta Federal Reserve President Raphael Bostic told CNBC on Monday the central bank may only be able to cut interest rates by a quarter point over the rest of the year given concerns about rising inflation stoked by higher import taxes.

In an interview published over the weekend, European Central Bank President Christine Lagarde said the dollar's recent decline reflected a loss of confidence in U.S. policies.

Spot gold rose 0.98% to $3,233.92 an ounce.

(Reporting by Caroline Valetkevitch in New York, with additional reporting by Samuel Indyk in London and by Wayne Cole; Editing by Jacqueline Wong, Christopher Cushing, Lincoln Feast, Kevin Liffey, Andrew Heavens and Richard Chang)