Stock futures fell Monday as investors responded to Moody's downgrade of the U.S.' credit rating.

Futures tied to the dropped 349 points, or 0.8%. futures pulled back 1.2%, while futures lost 1.6%.

Moody's on Friday the country's rating down by one notch to Aa1 from Aaa, bringing the agency in line with its peers. The firm cited the financing challenges tied to the federal government's growing budget deficit and the ramifications of rolling over existing U.S. debts in a period of high borrowing costs.

The debt downgrade pressured bond prices, sending yields higher, at a time when the economy is already under pressure from President Donald Trump's unfolding tariff policy. The 30-year U.S. bond yield traded above 5% on Monday.

"The fundamental factor of less foreign demand for them and the growing size of the pile of debt that needs to be constantly refinanced is not going to change," said Peter Boockvar, chief investment officer at Bleakley Financial Group, of the U.S. rating change. Moody's downgrade "is symbolic in the sense that here's a major rating agency that's calling out that the U.S. has strained debts and deficits."

The downgrade comes after a on Wall Street as investors cheered the White House's deal with China to . The agreement was seen as a breakthrough for global trade after Trump's initial plan for broad and steep import taxes was unveiled last month.

The technology-heavy Nasdaq Composite led the way, surging more than 7%. The broad S&P 500 jumped over 5% and posted a five-day winning streak.

The blue-chip Dow rallied more than 3% last week. Friday's gain of over 300 points pushed the 30-stock average into positive territory for 2025.

Investors on Monday will monitor speeches from U.S. central bank officials such as Atlanta Federal Reserve President Raphael Bostic, New York Fed President John Williams and Dallas Fed President Lorie Logan scheduled throughout the day. Leading indicators data is due in the morning.

30-year Treasury yield tops 5% after U.S. debt downgrade

The U.S. 30-year Treasury bond yield after Moody's slashed its rating on U.S. credit.

The yield sat at 5.023%, up more than 12 basis points on the day. Other Treasurys also lost value, pushing their yields higher. The benchmark 10-year Treasury note yield traded at 4.546%, while the 2-year yield hovered just above 4%.

— Fred Imbert

U.K. bond yields rise after UK-EU deal

British government bond yields are also on the rise in the wake of the EU and the U.K. to reset their post-Brexit relations.

Yields on 10-year U.K. government bonds, known as gilts, were up by around 7 basis points at 9:58 a.m. in London.

Bond yields and prices move in opposite directions.

— Chloe Taylor

European stocks open lower

European shares opened in negative territory on Monday, with the Stoxx 600 down 0.4% shortly after the opening bell.

Most sectors and all major bourses saw losses, with the and the shedding 0.5%, while Germany's traded 0.2% lower.

— Chloe Taylor

Trump tells Walmart to 'eat the tariffs'

President Donald Trump at on social media over the weekend.

"Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain," Trump wrote in a Saturday post on Truth Social.

"Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING," he added in the post. "I'll be watching, and so will your customers!!!"

Walmart said in a statement following the post that it was working to keep prices as low as can be. That comes after the company's finance chief warned last week that consumers as a result of Trump's tariff policy.

"We have always worked to keep our prices as low as possible and we won't stop," Walmart said in the statement. "We'll keep prices as low as we can for as long as we can given the reality of small retail margins."

— Alex Harring, Melissa Repko and Leslie Josephs

Stocks come off winning week

Stocks recorded as investors applauded the U.S.-China deal to temporarily slash tariffs.

The surged more than 7%. The jumped over 5% and posted a five-day winning streak. The rallied more than 3% last week and climbed into positive territory for 2025.

— Alex Harring

Stock futures are lower

Stock futures traded in the red shortly after 6 p.m. ET.

Dow futures lost 283 points, or 0.7%. S&P 500 futures fell 0.7%, while Nasdaq 100 futures slid 0.8%.

— Alex Harring