Treasury Secretary Scott Bessent downplayed the U.S. credit downgrade as a "lagging indicator" of economic and fiscal conditions, after Moody's took the U.S. off its top tier.

The Moody’s announcement sent the yield on a 30-year Treasury bond to a high of 5.01% at one point on Monday. Bond yields rise as bond prices fall. When a selloff hits and demand for bonds dries up, it sends bond prices lower. In turn, bond yields move higher.

U.S. stocks mostly eked slim gains overnight, but Moody’s downgrade of the U.S.’ credit rating gripped the bond market.

Longer-term Treasury yields are a bit lower early Tuesday, though remain just shy of recent highs amid concerns about the U.S. government's fiscal position. The 10-year Treasury yield touched 4.56% at one point on Monday,

The yield on both 10 and 30-year government bonds rose on Monday after another credit ratings agency downgraded the US on Friday.

There are good reasons why markets took the latest U.S. credit rating downgrade on the chin, but that will offer cold comfort to investors warily eyeing the country's deteriorating fiscal health.

Mortgage rates jumped higher on Monday following Moody's downgrade of U.S. debt, adding to the headwinds facing homebuyers.

Moody’s decision to lower the rating on U.S. government debt seems unlikely to shake up the corporate bond market too much.

The move came as Republicans seek to approve a large package of tax cuts, spending hikes and safety-net reductions which could add trillions of dollars in U.S. debt.

Longer-dated Treasury yields gained while the dollar broadly eased on Monday amid concerns about the U.S. debt load and a tax-cut bill, following Moody's downgrade of the country's sovereign credit rating.