U.S. stocks open lower after weak China trade data, Moody's downgrades U.S. banks

U.S. stock indexes opened lower on Tuesday with financial stocks tumbling after Moody's downgraded the credit rating of several small- to mid-sized U.S. banks and said it may lower the ratings on six major banks including U.S. Bancorp, State Street Corp., and Bank of New York Mellon Corp.. The Dow Jones Industrial Average dropped 247 points, or 0.7%, to 35,224, while the S&P 500 was off 0.7% and the Nasdaq Composite shed 0.8%.

China's trade fell much faster than expected in July, data on Tuesday showed. The country's exports plunged 14.5% for the year to July, the biggest decline since the outbreak of the COVID-19 pandemic in February 2020, while imports slid 12.4%, worse than forecast.

Bank shares were also in focus on Tuesday after Moody's Investor Service late Monday said it may cut its credit ratings on six major U.S. banks as the country's banking sector "continue to contend with interest rate and [asset and liability management] risks with implications for liquidity and capital," the credit ratings agency said. Shares of U.S. Bancorp (USB) fell 4.1%, while the State Street Corp. (STT) dropped 2.5% and the Bank of New York Mellon Corp. (BK) was off 2.1%, according to FactSet data.

-Isabel Wang

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08-08-23 0935ET

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