S&P Global (SPGI) Reaffirms U.S. Credit Rating But Warns of Tariff Impacts

S&P Global Ratings (SPGI) has reaffirmed its U.S. credit rating but warned of potential impacts from tariffs.

The ratings agency affirmed its current “AA+” credit rating for the United States with a stable outlook, saying that revenue gleaned from U.S. President Donald Trump’s import tariffs could potentially offset some of the fiscal impacts of his recently enacted tax and spending legislation.

S&P Global was the first ratings agency to downgrade the U.S. government’s credit rating to “AA+” from the highest “AAA” level in 2011, citing a deteriorating fiscal position and worries over federal government deficits and the national debt. Since then, all major credit rating agencies have downgraded America.

Outcomes vs. Unknowns

While S&P Global held its credit rating on the U.S. steady, the agency emphasized potential risks from tariffs and government policies, stating that future ratings on America will be based on policies rather than just intentions.

“Outcomes are what’s really going to weigh and inform the rating,” said S&P Global. “The outcomes of how you execute the budgetary legislation, how the tariff revenue comes, their combined impact on growth and investment that leads to either better or worse or similar fiscal outturns, that’s our focus.”

The U.S. government’s budget deficit for the current fiscal year stood at $1.6 trillion at the end of July, up 2% from a year ago. The national debt in America is currently at $37 trillion.

Is the SPDR S&P 500 ETF Trust a Buy?

The SPDR S&P 500 exchange-traded fund (SPY) currently has a consensus Moderate Buy rating among 504 Wall Street analysts. That rating is based on 425 Buy, 73 Hold, and six Sell recommendations issued in the last three months. The average SPY price target of $718.24 implies 12.68% upside from current levels.

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