OP Wire 5/19 (OP – Lite)

By Steve

Markets Pull Back Sharply After U.S. Credit Downgrade – Moody’s Shakes Confidence

Wall Street woke up to a wave of red Monday morning as Moody’s officially downgraded the U.S. credit rating from Aaa to Aa1, sending shockwaves across the globe and reigniting worries over debt, inflation, and economic momentum.

At 05:15 ET, the Dow Jones Futures dropped 385 points (-0.9%), the S&P 500 Futures slid 76 points (-1.3%), and the Nasdaq 100 Futures plunged 360 points (-1.7%)—erasing some of last week’s rally that was powered by a trade truce between the U.S. and China.

Last week’s performance was notably strong:

Nasdaq Composite surged over 7%
S&P 500 jumped more than 5%
Dow Jones Industrial Average climbed over 3%, flipping into positive territory for 2025

But this week starts with a stark tone shift…

Moody’s Downgrade Details

Moody’s, the last major credit agency to maintain the U.S.’s triple-A status since first awarding it in 1919, finally pulled the trigger on Friday—downgrading the rating to Aa1.

Why?

Concerns over the ballooning $36 trillion U.S. debt load
Uncertainty surrounding Trump’s proposed tax cuts, which are estimated to add $3–5 trillion to the deficit over the next decade
Limited progress from the Elon Musk-led Department of Government Efficiency, which was created to tackle government overspending

The downgrade triggered immediate criticism from the Trump administration, which claimed ongoing efforts are in place to reduce debt—but markets clearly aren’t convinced.

Political Spotlight: Trump’s Tax Push & Walmart Warning

Over the weekend, a House committee advanced Trump’s sweeping tax bill, setting up a potential floor vote this week—even as some Republicans remain opposed. The tax cuts are politically popular, but fiscally questionable given the Moody’s downgrade.

Meanwhile, Trump also targeted Walmart (NYSE: WMT)—insisting the retail giant should “eat the tariffs” and not pass price hikes onto consumers.
Walmart fired back last week, warning that even reduced tariffs from the new U.S.-China deal would increase priceson general merchandise.

As the world’s largest retailer and a barometer for consumer strength, Walmart’s warning casts a shadow over how deeply tariffs may ripple through the broader economy.

Tech in Focus: Nvidia Steals the Show

Nvidia (NASDAQ: NVDA) was in the spotlight Monday as CEO Jensen Huang delivered an electric keynote at Computex in Taiwan, revealing a suite of new AI-powered technologies:

AI data center solutions
Consumer cloud & computing tools
AI software for robotics

This comes as Nvidia continues its leadership at the forefront of the AI revolution—one of the few bullish anchors amid macro uncertainty.

Oil Slips After Chinese Data Misses

Crude oil prices gave back some recent gains Monday as traders digested mixed economic data from China:

Brent Crude: -0.5% to $65.10
WTI: -0.5% to $61.65

China’s industrial output surprised to the upside, but retail sales missed, highlighting shaky domestic demand. That, coupled with the Moody’s downgrade, added to market caution—especially with the U.S. being the world’s largest oil consumer.

Technical Outlook – Levels of Interest

Last week’s “gap and go” setup delivered as buyers charged upward, finishing near the final upside target of 21,500.

For this week, we’re watching how price behaves around 21,300:

Above 21,300: Targets are 21,800 → 22,000 → All-time high at 22,650
Below 21,300: Downside levels open at 21,000 → 20,300

Don’t let the headlines shake your edge. Focus on the charts and price action.

Quick Reference:

Upside Levels: 21,800 → 22,000 → 22,650
Downside Levels: 21,300 → 21,000 → 20,300

This Week’s Key Economic Events:

Thursday: Flash Manufacturing PMI

Earnings to Watch:

Wednesday: BIDU, TGT, SNOW

Shoutout to the OP Fam — huge congrats on the $NFLX and $DIS put plays from Friday’s chat! You will be PAID!

See you all in chat and remember:
Stay focused. Stay disciplined. Stack Your Gains.

—Team OP

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