5 Things to Know Before the Stock Market Opens

U.S. stock futures are pointing lower as investors digest Moody’s credit rating downgrade of the U.S. government; Walmart (WMT) shares are falling in premarket trading after President Donald Trump says the company should “eat” tariffs on China; Nvidia (NVDA) and Foxconn say they will build an AI factory supercomputer in Taiwan; and alcoholic beverage giant Diageo (DEO) says it expects a $150 million annual hit because of tariffs. Here’s what investors need to know today.

1. US Stock Futures Point Lower After US Credit Rating Cut

U.S. stock futures are pointing lower as investors weigh Moody’s U.S. credit downgrade while preparing for earnings, Fed speak, and housing data this week. Nasdaq futures are 1.6% lower after the tech-focused index gained more than 7% last week. S&P 500 and Dow Jones Industrial Average futures are lower by 1.2% and 0.7%, respectively, after the indexes also posted strong gains last week. Bitcoin (BTCUSD) is falling to trade around the $103,000 level, while oil futures also are dropping. The yield on the 10-year Treasury note and gold futures are rising.

2. Moody’s Downgrades US Credit Rating, Citing Fiscal Deficit

Moody’s ratings agency downgraded the U.S. government from its top-notch credit rating, citing “persistent, large fiscal deficits” that show no signs of slowing. The downgrade places the U.S. government one rung below Moody’s Aaa status. The rating cut comes as Congress considers a budget that would extend significant tax cuts and boost spending, which is currently under discussion in the House of Representatives. Moody’s projected U.S. debt would swell to 134% of the country’s GDP by 2035, up from 98% last year.

3. Walmart Stock Falls After Trump Says Retailer Should ‘Eat’ Tariffs

Walmart (WMT) shares are 2% lower in premarket trading after President Donald Trump wrote in a social media post that the retail giant should absorb tariffs on goods made in China and other countries instead of raising prices. The company recently warned that it would be forced to hike prices. Trump responded this weekend on Truth Social that the retail giant made “BILLIONS OF DOLLARS last year, far more than expected,” and that between Walmart and China “should, as is said, ‘EAT THE TARIFFS.'” Trump’s comments come as several companies have said they are considering raising prices in response to tariff hikes.

4. Nvidia, Foxconn to Build AI Supercomputer in Taiwan

Chipmaking giant Nvidia (NVDA) and longtime partner Foxconn announced Sunday that they will build an AI factory supercomputer in Taiwan. Nvidia and the Taiwanese-based Foxconn said they would work with Taiwan’s government to build an AI factory made up of 10,000 Nvidia Blackwell GPUs. Taiwan Semiconductor Manufacturing Co. (TSM) said it will use the AI system the two create to advance its research and development. Last month, Nvidia said it planned to build AI supercomputers entirely in the U.S.. Nvidia shares are 3% lower in premarket trading.

5. Guinness Parent Diageo Sees $150M Annual Hit From Tariffs

U.S.-listed shares of Diageo (DEO) are slipping 1% in premarket trading after the British alcoholic beverage giant said in its fiscal third-quarter results that it expects a $150 million annualized hit from tariffs. The parent of Guinness, Johnnie Walker, and Smirnoff said it would look to cut costs by $500 million over the next three years as it navigates the additional import duties. The U.S. recently announced a trade deal with the U.K. that would reduce some tariffs on products from that country but would keep in place a 10% baseline tariff.