A Moody Downgrade 😠

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Jocelin A. & Sean H.
May 19, 2025 • Estimated Reading Time: 10 minutes

TLDR

MARKET RECAP → The S&P 500 (VOO) managed to eke out a small gain on Monday after the US received a(nother) credit downgrade.

MOODY’S DOWNGRADE SENDS YIELDS SOARING → 📉 Moody’s (MCO) downgraded the U.S. credit rating to Aa1, leading to a surge in Treasury yields and declines in stock markets, as investors grapple with concerns over fiscal stability and rising borrowing costs.

REGENERON BUYS 23ANDME'S DNA BUSINESS → 🧬 Regeneron (REGN) scooped up most of 23andMe’s assets for $256M after its bankruptcy, betting big on DNA while promising to respect user privacy — just don’t expect Lemonaid Health to make the cut.

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Moody’s Downgrade Sends Yields Soaring

📉 Moody’s (MCO) has downgraded the U.S. credit rating from Aaa to Aa1, citing persistent fiscal deficits and rising debt levels. This move aligns Moody’s with Fitch and S&P, both of which previously downgraded the U.S. credit rating.

💰 Following the downgrade, the yield on the 30-year U.S. Treasury bond surpassed 5%, the highest since November 2023. The 10-year yield also rose to 4.53%, indicating increased borrowing costs for the government.

📉 U.S. stock markets reacted negatively, with the S&P 500 down 0.9%, the Dow Jones Industrial Average falling 222 points, and the Nasdaq Composite declining by 1.3%. The U.S. dollar weakened against major currencies, while gold prices rose as investors sought safe-haven assets.

TODAY’S TOP NEWS

Regeneron Buys 23andMe’s DNA Business

Source: Shutterstock

🔬 Regeneron (REGN) scooped up most of 23andMe's assets for $256 million in a bankruptcy auction, acquiring its core DNA testing and research services — but not its pricey telehealth unit Lemonaid Health, which will be shut down. The deal still requires court approval and is expected to close by Q3.

📉 Once a $6 billion disruptor, 23andMe filed for bankruptcy in March, following years of weak recurring revenue, failed ventures into therapeutics, and a massive data breach that exposed info from nearly 7 million users. Regeneron aims to integrate the company’s genetic data into its drug development efforts.

🛡️ The acquisition comes with privacy strings attached. All bidders had to honor 23andMe’s privacy policy, and a court-appointed privacy ombudsman will assess compliance. The FTC and lawmakers raised concerns about the deal, with a privacy report due by June 10.

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