(Reuters) – Wall Street’s main indexes slipped on Monday, with technology stocks falling as Treasury yields spiked after Moody’s downgraded the U.S. sovereign rating, sharpening focus on its mounting debt.

Moody’s cut the United States’ sovereign credit rating to “Aa1” from “Aaa” late on Friday owing to concerns about its ballooning $36-trillion debt, becoming the last of the three major credit rating agencies to downgrade the country. It had first given the U.S. its pristine “Aaa” rating in 1919.

“Nothing new, but it’s putting a lot of things that the market has worried about rightfully back into focus,” said Ross Mayfield, investment strategist at Baird.

“The trade headwinds keep markets volatile, but this morning in particular, it’s about the Moody’s downgrade.”

Worries About Increasing US Deficit

Worries about the ever-increasing U.S. deficit were front and center as U.S. President Donald Trump’s sweeping tax-cut bill – which Republican infighting over spending cuts had stalled for days – won approval from a key congressional committee on Sunday.

At 09:35 a.m. ET, the Dow Jones Industrial Average fell 222.40 points, or 0.52%, to 42,432.34, the S&P 500 lost 55.42 points, or 0.93%, to 5,902.96, and the Nasdaq Composite lost 257.49 points, or 1.34%, to 18,953.61.

Ten of the 11 S&P sub-sectors fell, with consumer discretionary and energy being the worst performers.

Highly valued technology stocks took a hit as rising rates tend to discount the present value of future profits. Tesla led losses among megacap and growth stocks with a 4.1% fall.

Chip stocks also sold off. Nvidia was down 1.4% and a gauge for semiconductor stocks shed 1.9%.

Yields on U.S. government bonds – which move inversely to prices – ticked higher, with the 10-year note rising 9 basis points to 4.526% and the 30-year note touching 4.998%.

The S&P 500 had registered its fifth straight day of gains on Friday, closing out the week with firm gains as markets took heart from a temporary tariff truce between the U.S. and China along with tame inflation data.

U.S. Treasury Secretary Scott Bessent said in television interviews over the weekend that Trump would impose tariffs at the rates he had threatened last month on trading partners that do not negotiate deals in “good faith”.

US Federal Reserve May Only Be Able to Cut Interest Rates Slightly

The U.S. Federal Reserve might only be able to cut interest rates by a quarter point through the rest of the year, Atlanta Fed president Raphael Bostic said, while New York Fed President John Williams said that the interest-rate policy was in the right place to deal with an uncertain economic outlook.

In other moves, Netflix fell almost 1% after J.P.Morgan removed the stock from its U.S. analyst focus list.

TXNM Energy jumped 7.6% after the utility said it would be acquired by the infrastructure unit of Blackstone in an $11.5-billion deal.

Declining issues outnumbered advancers by a 5.98-to-1 ratio on the NYSE, and by a 2.91-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and no new lows, while the Nasdaq Composite recorded 10 new highs and 23 new lows.

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(Reporting by Shashwat Chauhan and Kanchana Chakravarthy in Bengaluru; Editing by Varun H K and Pooja Desai)