Turbulent trading hit financial markets on Monday, with U.S. stocks, bonds and the dollar sliding in morning trading and rebounding by the afternoon, as nervy investors appeared sensitive to the latest wrangling over the government’s budget.

After an early decline, the S&P 500 index recovered to trade roughly flat in the afternoon, ending the day 0.1 percent higher. Bond markets also shuddered, with U.S. Treasury prices falling and their yields, which underpin interest rates across the economy, rising in morning trading before retracing their steps later in the day. The yield on 10-year Treasuries nudged lower to just under 4.5 percent. The dollar also regained some ground but a gauge of its value against other major currencies remained 0.7 percent lower.

One factor jarring markets is a bill in Congress that would make President Trump’s signature 2017 tax cuts permanent and could add trillions of dollars to federal debt. A House committee voted to approve the bill Sunday night, although it was expected to remain a focus of contentious congressional debate.

Alongside some lawmakers’ misgivings that the bill failed to materially cut the deficit, markets soothed on Monday, amid early signs of potential progress on negotiations to further rein in spending.

The United States’ loss of its last triple-A credit rating late on Friday and mounting concerns about government debt have threatened to disrupt the relative calm in markets that has prevailed since Mr. Trump paused many of his tariffs in recent weeks.

In downgrading the U.S. credit rating, Moody’s cited the tax cut legislation along with broader concerns about the fiscal deficit and growing debt costs. The move by Moody’s means that all three major rating agencies no longer consider the United States qualified for their top credit ratings.