Stocks on the Dow Jones Industrial Average climb, bolstered by Home Depot's earnings report, while S&P Ratings Services updates U.S. credit rating status.
The credit rating for the United States, one of the world's largest economies, has remained at AA+ following an update by S&P Global Ratings. This decision comes amidst a backdrop of various factors influencing the U.S. creditworthiness, including economic size, per-capita income, business environment, corporate credit risk trends, tightening bank lending standards, and risks related to governance and sustainability.
In August 2025, Fitch Ratings affirmed the U.S. sovereign credit rating at AA+ with a stable outlook, recognising the country's large economy, high per-capita income, and dynamic business environment as fundamental strengths, despite some weaknesses.
Moody's, on the other hand, has expressed concerns about the increasing pressure on U.S. corporate credit risk. The tightening of bank lending standards from 0% in late 2024 to 18.5% in Q2 2025 has affected medium and smaller companies, potentially increasing default risk and credit risk overall. Moody's also integrates environmental, social, and governance (ESG) factors into credit risk assessments, highlighting governance as a key driver affecting rating changes.
The tightening lending standards and ongoing macroeconomic conditions imply sustained elevated risk, which indirectly impacts perceptions of the U.S. creditworthiness. Despite these challenges, Moody's public corporate credit risk remains range-bound, but the potential for increased risk is a concern that could impact the U.S. credit rating in the future.
Historically, Moody's and Fitch have downgraded or placed the U.S. outlooks under review due to rising debt levels, political uncertainty, and fiscal deficits in past years. However, recent assessments still affirm the U.S. rating at high levels, though with added caution regarding economic and governance risks.
Investors should note that major U.S. stocks are mostly upbeat, holding near record highs. However, the 10-year and 30-year Treasury yields dropped after S&P Global's report to hover around 4.32% and 4.91% respectively.
S&P Global Ratings has also noted that tariffs could help the U.S. fiscal health amid Trump's tax cuts. The outlook from S&P Global Ratings for the U.S. credit rating remains unchanged since 2011, following a downgrade from AAA in 2011.
Interestingly, Bitcoin bounced off lows of $114k, while stablecoins have surged to record highs, potentially signaling the strongest bullish signal since 2021.
In conclusion, the U.S. credit rating has experienced pressure from tightening credit conditions, rising corporate risk, and governance considerations. However, the cautious reaffirmations by Fitch and Moody's rather than deep downgrades since mid-2025 suggest that the U.S. creditworthiness remains relatively stable, despite the challenges.
Read also:
- Musk threatens Apple with litigation amidst increasing conflict surrounding Altman's OpenAI endeavor
- Innovative Garments and Accessories Producing Energy: Exploring Unconventional Sources for Renewable Power
- Latest Automotive Update, August 13: Introducing Ola Electric's latest scooters, MG Windsor EV sales hitting new highs, Mahindra BE 6 teaser unveiled, and more...
- Digital Commerce Giant Clips Unveils Its Latest Offering, Clip Ultra, Fortifying Its Dominance in Mexico's Market
