CNBC Business News Update - Market Open: Stocks Lower on Moody's Downgrade Of US Credit, Bond Yields Higher, Tax Bill Would Increase Deficit 5/19/25

Episode Date: May 19, 2025

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored by CNBC's Jessica Ettinger.

I'm Jessica Edinger CNBC. Wall Street's in the red out of the gate. The S&P 500 index and the NASDAQ each falling from two and a half month highs. Markets coming off that rally on Friday and a winning week, but over the weekend the U.S. got a credit downgrade from Moody's. Bond yields are popping today giving investors better returns with less risk. The 30 year treasury is above 5 percent, the 10-year above 4.5 percent. The Dow falling 275 points a half percent. Apple shares leading the way. They're down more than 2 percent.

The S&P 500 index down 58. That's almost 1 percent. The Nasdaq down 245 points, 1 1 3 percent. The U.S. had its credit rating downgraded over the weekend by Moody's, the final of the big three credit rating agencies to do so. It's worried about the U.S. deficit as lawmakers work on a tax bill in Washington. As I look at the Moody's downgrade, a lot of this comes down to that cost that I talked

about being the most expensive bill. I think after the election, most people anticipated the extension of the Trump tax cuts to be about a $1.5 trillion expense. We're talking something in the five, six, seven trillion dollars in a lot of these tax provisions are front end loaded. They are supercharging fiscal stimulus here and the cuts are back end loaded.

So the actual cost of this bill could be even higher. Raymond James, Washington policy analyst, Ed Mills on CNBC. Treasury Secretary Scott Besant had this to say about Moody's on NBC News Meet the Press. I think that Moody's is a lagging indicator. I think that's what everyone thinks of credit agencies. Besant also acknowledged that tariffs may raise prices at retailers, including Walmart.

While President Trump posted over the weekend that Walmart should eat the tariff cost, Besant said he spoke to Walmart's CEO over the weekend and concluded the world's largest retailer would eat some of the tariffs, although that means consumers will still see some higher prices. Conceivably, you're gonna be getting a tax cut, seen as positive.

To the chagrin and moody's. To the chagrin and moody's and our overall budget deficit. Only the rich will get tax cuts and they don't, they don't shop at Walmart? They don't shop at Walmart? Well, you do and you're rich. I love Walmart. Yeah.

I think Walmart offers great prices. I know, why wouldn't you? Well, I mean, like anyone who's actually been to Walmart, and I don't know how much time the president has spent at Walmart, would realize very quickly that, wow, this place is so much cheaper than everywhere else. CNBC's Jim Cramer, Carl Quintanilla, and David Faber. Here's what businesses are telling CNBC.

If you've got corporates absorbing the tariff impact, it's not like that is, you know, something that happens in a vacuum. If they're forced to absorb the cost and it becomes too much of an issue, then we could be looking at job cuts down the line. And I think, you know, the ultimate economic direction of the U.S. is going to come down to the labor market and whether we do start to see companies shedding jobs to protect margins. That's CNBC Europe's Juliana title bomb. Bitcoin briefly hit a high of 107,000, its highest since the end of January, although

it's pulled back a little today. Crypto exchange Coinbase in the S&P 500 today, replacing Discover, which was bought by Capital One. Biotech Regeneron, the winner of the remnants of bankrupt genetic testing service 23andMe at auction for about a quarter million dollars. Consumers who've used 23andMe were urged by privacy experts to request their data

before it's used by other companies. Consumers who've used 23andMe were urged by privacy experts to request their data before it's used by other companies. Iowa-based ice cream maker Wells recalling nearly 20,000 containers of Blue Bunny and Halo Top ice cream and frozen yogurt. The containers could contain pieces of plastic. Warner Brothers' horror film Final Destination Bloodlines won the weekend box office. Jessica Edinger CNBC.