Global stock markets were off somewhat again on Tuesday, with Moody's decision to cut the outlook for China's sovereign credit rating on Tuesday adding even more pressure to the year's alarming market underperformance there and clocking a five-year closing low for its benchmark stock index. Monday proved to be a step back for the main U.S. stock indices and bond markets as they consolidated last week's surge on hopes the Federal Reserve is finally done tightening and ready to ease in 2024. But while some suspect the rates market ebullience may have jumped the gun - and two Fed cuts by June are still more than fully priced - the emphasis merely shifted to small caps that have underperformed all year due to a disproportionate hit from higher borrowing costs.

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