S&P Global Shares Tumble 3.35% Amid Credit Downgrade and Market Pressures
1min read Recently, S&P Global (SPGI) has been actively influencing market dynamics with its credit rating adjustments and economic assessments. On March 7, the company’s shares declined by 3.35%, marking a two-day slump of 4.95% following a series of market pressures. These market movements were further underscored by S&P Global's decision to downgrade Stellantis' credit rating from "BBB+" to "BBB", a reflection of the automobile manufacturer's challenges in both the North American and European markets.
The downgraded credit rating was largely attributed to Stellantis' weakening profit margins amidst a competitive environment and tariff uncertainties in the U.S. The company’s strategy to implement significant price cuts by the end of 2024—while initially boosting sales—has nonetheless eroded its profitability. Moreover, as consumer sensitivity to high vehicle prices increases, Stellantis' growth prospects appear limited.
S&P Global's report forecasted that stellantis might avoid internalizing the cost of U.S. tariffs by adjusting pricing strategies and potentially shifting production capabilities to the United States, thereby leveraging "America First" policies. This strategic move comes at a time when Stellantis is reassessing its financial outlook into 2025, especially after last year's performance was notably impacted by the challenges within its North American operations. The financial strain has also been reflected in executive changes, with the former CEO stepping down amid these pressures.
Meanwhile, S&P Global also announced a decline in the Hong Kong Purchasing Managers' Index (PMI) for February, which fell to 49 from January’s 51, signaling a contraction in the business environment. This represents a significant shift, marking the first downturn since September last year. Declines in manufacturing orders and output were noted as the most pronounced areas affected. The economic outlook remains cautious, exacerbated by rising costs and global tariff concerns, which continue to weigh on demand.