European stocks subdued as corporate news outweighs US credit downgrade

European stocks closed flat on Monday, following a five-week winning streak, as declines from a surprise U.S. credit rating downgrade were offset by upbeat corporate updates.

The pan-European STOXX 600 index  pared earlier declines to close 0.1% higher, hovering around the seven-week intraday high it touched on Friday.

Credit rating agency Moody's cut its ratings on U.S. debt on Friday, citing concerns about the nation's growing $36 trillion debt pile, which sent jitters across global markets earlier in the day.

"The downgrade reflects what markets already know: we're in a new fiscal regime defined by austerity via tariffs and caps... Don't overreact to the downgrade itself as history shows these calls often lag the fundamentals," said Lale Akoner, global market analyst at eToro.

Wall Street's main indexes were lower, and longer-dated U.S. Treasury yields rose, though were off their session peaks.

Meanwhile, U.S. President Donald Trump's sweeping tax-cut bill, which had been stalled for days, won approval from a key congressional committee on Sunday, while Treasury Secretary Scott Bessent said in television interviews that President Donald Trump will carry out tariff threats if trading partners do not negotiate in "good faith" on deals.