Moody's U.S. debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields to put pressure on stocks that are trading at elevated valuations.

Moody's cut the U.S. credit rating last week, dropping it one notch from the top rating of Aaa to a lower classification of Aa1.

Stocks and US government bond prices at first fell sharply early in Monday’s trading, but they trimmed their losses as the day progressed.