Chicago postponed the sale of about $292 million of tax-exempt bonds from an $800 million general obligation bond deal.
FEMA must speed its very slow disbursement of aid, many observers say.
The Aa2 rating was affirmed, but the negative outlook could raise the stakes as New York lawmakers debate the city's budget gap.
"There was a certain amount of resilience munis had in the last week, comfortable enough with distribution," said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital Markets. "But the 10-year Treasury backing up behind 4.20%, it proved to be the catalyst for adjusted bid-sides."
The state says the $6.5 billion project is not possible without toll revenue.
The initiative would create a bond-funded program to help middle-class homebuyers afford a downpayment.
