Global markets digested recent credit signals with cautious optimism on Tuesday, following a week marked by heightened concern over the U.S. fiscal outlook. Moody’s revised its outlook on the United States' sovereign credit rating to negative, citing fiscal deterioration and rising debt levels, which have now surpassed $36 trillion. While this sparked a brief selloff in U.S. Treasuries on Monday, bond yields steadied during Asian trading hours, allowing the U.S. dollar (USD) to firm slightly and Asian equities to rebound.

Investor anxiety surrounding the U.S. fiscal outlook intensified last Friday after Moody’s Investors Service downgraded the country’s sovereign credit rating by one notch. The move, which follows similar actions by other leading rating agencies, underscores growing unease about the sustainability of the United States’ ballooning national debt, now approaching $36 trillion.