US stocks drop as bank shares slide after Moody's downgrades 10 firms

• US stocks dropped Tuesday, and the Dow lost more than 260 points at the open.
• Moody's downgraded 10 US banks and also put other firms on downgrade watch.

US stocks opened lower on Tuesday, with the Dow shedding almost 300 points as investors assess Moody's downgrade of 10 small and mid-sized US banks.

Moody's slashed the credit ratings on the banks on Monday, while also placing several other larger firms under review including Bank of New York Mellon, US Bankcorp, Northern Trust, and State Street.

The rating agency also published negative outlooks for 11 banks, including Citizens Financial and Capital One.

Shares of mega-cap banks were also down on the move, with Bank of America, JPMorgan, and all trading lower by nearly 3% Tuesday morning.

Elsewhere in the market, investors continue to take in stronger-than-expected earnings for the second quarter. Of the companies that have reported earnings so far, 81% are beating profit estimates by a median of 7%, Fundstrat data shows.

On Thursday, markets will be watching for July's CPI reading which, combined with incoming labor market data, will help inform the Federal Reserve's next policy decision.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Tuesday:

• S&P 500: 4,485.31, down 0.74%

• Dow Jones Industrial Average: 35,180.01, down 0.83% (293.12 points)

• Nasdaq Composite: 13,871.55, down 0.88%

Here's what else is going on:

• Paypal's latest crypto play is a stablecoin pegged to the US dollar.
• Hedge funds are being forced to cover their bearish bets with the stock market still surging.
• Hindenburg has fueled a massive wealth wipeout for three of the world's richest men this year.
• Shark Tank star Kevin O'Leary said the S&P 500 will surf a tidal wave of government spending.
• China's property sector is facing pain as yet another developer reportedly runs into trouble.
• Goldman Sachs is wrestling with sanctions fallout with Russia.

In commodities, bonds, and crypto:

• Oil prices dropped, with West Texas Intermediate down 1.92% to $80.37 a barrel. Brent crude, the international benchmark, inched lower 1.83% to $83.76 a barrel.
• Gold edged lower 0.50% to $1,960 per ounce.
• The 10-year Treasury yield fell eight basis points to 3.996%.
• Bitcoin moved higher 1.38% to $29,465.01.