Wall Street Ends Mixed Amid Bond Shock Credit Downgrade and Tech Rebound

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•  22 May 2025
 

Wall Street closed mixed as investors grappled with a flurry of market-moving events. The Nasdaq inched higher by 0.3%, boosted by a cautious tech rebound, while the Dow Jones and S&P 500 finished near flat after a turbulent session.

A sharp selloff in U.S. Treasury bonds the day before continued to weigh on sentiment. Moody’s downgraded the U.S. credit rating, raising alarms over the national debt and increasing concerns about long-term borrowing costs and tighter credit conditions across the economy.

President Trump tax reform bill narrowly passed the House with a 215-214 vote. While the bill includes tax cuts and Medicare eligibility changes, it’s projected by the CBO to cost over $4 trillion—intensifying concerns over fiscal discipline and government debt.

Bond yields surged in response, with the 30-year U.S. Treasury yield hitting 5.09% a high not seen since October 2023—while 10-year yields reached 4.59%.

In crypto, Bitcoin continued its rally, blasting through $111,000 after gaining 15% this month. Optimism surged as the U.S. Senate advanced the GENIUS Act, aimed at regulating stablecoins. Trump advisor David Sacks noted the legislation could trigger massive demand for U.S. bonds.

The EV market saw a major shake-up as China’s BYD surpassed Tesla in European sales for the first time. BYD’s affordable Dolphin Surf model helped it achieve a 169% sales spike, while Tesla’s sales slid 49%.

Looking ahead, Morgan Stanley is staying bullish, projecting the S&P 500 will reach 6,500 by mid-2026, powered by growth in tech and AI sectors.