Wall Street veteran Jim Cramer is advising investors to stay composed following Moody’s historic downgrade of U.S. debt, the agency’s first such move in over a century.

The downgrade, which came after markets closed on Friday, pushed Treasury yields higher and briefly dragged down major indexes at the start of Monday’s trading. But despite the initial dip, stocks recovered to close slightly higher, as investors appeared to shrug off the worst of the downgrade fears.

Moody’s decision to cut the U.S. sovereign credit rating from Aaa to Aa1 underpins the agency’s mounting concern about the federal government’s ability to manage its rising debt burden, now above $36 trillion. Citing a “continued rise in the debt burden and a lack of effective fiscal policy measures,” Moody’s said the U.S. faces increased risks that “are unlikely to be reversed in the near term.”

The market reaction on Monday reflected some of that unease. The Dow Jones Industrial Average opened more than 300 points lower, while the S&P 500 dipped 1% at session lows. Treasury yields, especially on the long end, surged, pushing the 30-year yield briefly above 5%, the highest since 2023. However, by the end of the day, the Dow closed up 0.32%, the Nasdaq eked out a 0.02% gain, and the S&P 500 ended up 0.09%, extending its winning streak to six sessions.

“Fear is what must be tamed”

Cramer, host of CNBC’s Mad Money, pushed back against the panic triggered by Moody’s downgrade, urging investors to resist what he called a fear-driven sell-off. He compared the reaction to past downgrades from S&P in 2011 and Fitch in 2023, which caused temporary turbulence but ultimately had little long-term impact on market performance.

“Fear is what must be tamed, if you want to be a good investor,” Cramer said during his segment on Monday. “Friday’s post-close downgrade was just that: a ‘get out now’ story that spooked investors into selling out of perfectly fine portfolios.”

He noted that investors are “conditioned to be fearful” whenever credit rating agencies make moves like this. Rather than acting impulsively, Cramer said, investors should interpret the downgrade as a cautionary flag—one that signals a need for smarter allocation, not panic.

“You are being given an early warning to invest more—not more aggressively—but more of what you can save. That’s the real hedge if you’re worried about the government’s creditworthiness, not the ‘get out now,’” he said.

Cramer’s advice diverges sharply from the sentiment that often follows such sovereign downgrades. He warned that this would not be the last time investors are told to pull out of the market, but emphasized that many of these alerts are designed to generate fear, not to protect portfolios.

“The people who write these are either fools who know nothing or incredibly shrewd short sellers who really need to spread fear because of their business model,” Cramer added, in a direct swipe at what he sees as agenda-driven messaging from credit analysts or market pessimists.

Gold, Bitcoin, and a long-term mindset

While playing down the downgrade’s significance, Cramer acknowledged that investors worried about ballooning federal debt could consider hedges like gold and Bitcoin.

“If you want to act on that fear, those are your hedges,” he said. But again, he insisted the best strategy remains disciplined investing focused on savings and fundamentals, not reactionary exits.

His commentary came amid growing concerns over Washington’s long-term fiscal path. With a divided Congress and persistent partisan gridlock, investors worry that there’s little appetite in Washington for making tough decisions on taxes or entitlement reforms. Moody’s flagged these political limitations as a core reason for its downgrade.

The government’s fiscal deficits remain very large, and the debt affordability metrics will continue to deteriorate, the agency said in its assessment. The downgrade, Moody’s added, reflects the significant decline in debt affordability in recent years.

However, for all the alarms raised, many market analysts view the impact of the downgrade as largely symbolic. Speaking to Reuters, several analysts noted that Moody’s move was already priced in.

A downgrade decades in the making

This is not the first time a major rating agency has downgraded the U.S. S&P stripped the U.S. of its triple-A rating in 2011 during a similar debt-ceiling standoff in Congress. Fitch followed suit in 2023, citing political instability and rising deficits.

Moody’s, which until Friday had maintained the U.S.’s top-tier rating, finally made the move after repeated warnings throughout 2024. It said it no longer had confidence that lawmakers would implement the necessary reforms to restore the government’s financial health.

Despite the historic nature of the downgrade, Wall Street is not treating it as a watershed moment. The rebound in stocks on Monday suggests that investors are focusing on the current strength of the U.S. economy, rather than Moody’s long-term concerns. Unemployment remains low, corporate earnings have come in strong, and consumer spending continues to hold up.

Moody’s downgrade may be a wake-up call for Washington more than Wall Street. With debt service costs surging and political dysfunction worsening, the long-term risks are real. But in the short term, the fundamentals of the U.S. economy seem to remain intact.

This seems to have informed Cramer’s advice to investors tempted to abandon their positions amid fear, stay the course, tune out the noise, and invest prudently.

Fidelity Bank Plc has denied media reports claiming that the Supreme Court has ordered it to pay a staggering N225 billion to Sagecom Concepts Limited, describing the figures as grossly inflated and misleading.

The bank clarified that its computation, based on legal precedent and the context of the case, puts the liability closer to N14 billion.

The clarification comes amid swirling concerns triggered by a recent People’s Gazette report, which suggested the bank had entered negotiations with Sagecom’s legal team to arrange a structured repayment of the massive judgment debt. The report, quoting insiders, claimed Fidelity was struggling under the weight of the financial obligation and risked insolvency unless a settlement was quickly reached.

“This is the biggest crisis the bank has ever faced,” PG quoted a top bank official as saying, during a weekend video call. “The obligation is simply too big. If the bank survives this, it will be thanks to the goodwill of the small business that won this unprecedented judgment.”

The publication sparked anxiety within financial circles and on social media, prompting Fidelity to issue a detailed rebuttal on Monday. The bank accused unnamed parties of deliberately orchestrating and syndicating the story to embarrass the institution and sow doubts about its financial health.

Origins of the Dispute

The legal battle dates back more than two decades, tracing its roots to a 2002 credit facility granted by the now-defunct FSB International Bank—later acquired by Fidelity Bank—to G. Cappa Plc. The facility, valued at $3 million, was secured with a mortgage on a property located in Ikoyi, Lagos.

G. Cappa allegedly defaulted on the loan. To recover the debt, FSB moved to sell the mortgaged property. But in a bid to halt the sale, G. Cappa filed a lawsuit at the Federal High Court in Lagos seeking to restrain the bank from disposing of the asset.

The court eventually ruled in favor of the bank, affirming its right as legal mortgagor to sell the property, which it did in 2011 to Sagecom Concepts Limited. However, it stopped short of granting Sagecom vacant possession, instead referring the matter to the Lagos State High Court for determination.

G. Cappa remained in physical possession of the property, continued to collect rent from it, and refused to hand over control to Sagecom, despite the sale. This prompted Sagecom to file a lawsuit against both G. Cappa and Fidelity Bank in 2011, seeking damages for breach of contract and compensation for the denied use of the property.

In 2018, the Lagos High Court ruled in favor of Sagecom and awarded significant damages. The judgment was appealed, eventually landing at the Supreme Court, which upheld the ruling earlier this year.

Fidelity Bank’s Response

In a statement signed by Meksley Nwagboh, Divisional Head of Brand & Communications, Fidelity Bank, confirmed the judgment but strongly disputed the figures being circulated in the media.

“We take these malicious reports seriously and are committed to protecting our bank’s reputation and the interests of our stakeholders. Rest assured, Fidelity Bank continues to operate as one of Nigeria’s most capitalized financial institutions, with no risk of bankruptcy,” the statement said.

The bank referenced a Supreme Court judgment delivered in January 2025 in Anibaba v. Dana Airlines Ltd, which held that foreign currency judgment debts must be converted into naira at the exchange rate prevailing on the date of the trial court’s judgment. Applying that standard to the 30 January 2018 judgment in the Sagecom case, the bank said the total debt would still not exceed N30.7 billion.

Even at that, the bank insisted that G. Cappa should bear a significant share of the liability, having remained in possession of the property and allegedly collected rent between 2005 and 2018, when possession was finally delivered to Sagecom.

“Sagecom’s claim was largely made up of lost rental income and interest. G. Cappa’s actions in retaining possession caused the bulk of that loss,” the statement noted.

Fidelity said it has since applied to the Supreme Court for clarification of the judgment, citing “significant ambiguities” in its interpretation and implementation.

The bank is seeking an official judicial inquiry into the proper quantification of the judgment debt and how the liability is to be shared between it and G. Cappa.

The apex court reportedly issued an injunction on 7 May 2025, ordering all parties to maintain the status quo. It also restrained Sagecom and other entities from publishing any material on the matter in the media pending the determination of Fidelity’s application.

The bank expressed concern that the order has been ignored by some stakeholders, leading to a wave of speculative reports, which it says are aimed at damaging its reputation.

In the face of rising speculation, Fidelity Bank used the opportunity to reaffirm its financial strength and operational soundness. The bank said it remains highly capitalized and profitable, with international operations and a strong asset base.

“These claims are unfounded, and we want to assure our customers, investors, and the public that Fidelity Bank remains financially strong, profitable, and fully capable of meeting all its obligations,” the bank said.

Fidelity cited its Q1 2025 financial results as evidence of its health, noting that these are publicly available for verification. The bank’s shares closed at N20.05 on the Nigerian Exchange on Monday, with a modest 0.5% month-to-date performance.

While Fidelity continues to contest the reported amount, financial analysts note that the bank’s swift move to clarify its position reflects the sensitivity of the issue in the financial system.

However, there’s no official confirmation yet about the rumored negotiations between the bank and Sagecom’s legal team, although industry insiders suggest discussions have commenced privately to settle the matter without further escalation.