Stocks fall as Fitch's downgrade of US debt rating rattles confidence
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- US stocks declined Wednesday as earnings continued to roll in.
- Ratings agency Fitch downgraded US debt from AAA to AA+ late Tuesday.
- Meanwhile, about 82% of corporate earnings have beat expectations, per FactSet data.
Stocks moved lower at the start of trading Wednesday following Fitch's downgrade of US debt late Tuesday.
In dropping its long-term rating for the US from AAA to AA+, the ratings agency pointed to the US's rising debts and complicated outlook for managing it amid political feuding in the capitol.
Just two months ago lawmakers and President Joe Biden reached an 11th-hour deal to avoid a government default.
"There has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," Fitch said in a statement.
Meanwhile, corporate earnings continued to roll in, with Advanced Micro Devices, CVS Health, and SolarEdge Technologies comprising the latest batch.
According to FactSet data, 82% of S&P 500 companies that have reported so far have posted positive surprises.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:
- S&P 500: 4,545.31, down 0.69%
- Dow Jones Industrial Average: 35,505.97, down 0.35% (124.71 points)
- Nasdaq Composite:14,123.77, down 1.09%
Here's what else is going on:
- Investors are making the same mistake they made during the dot-com and housing bubble, according to an analyst.
- China is Binance's biggest market despite its ban on crypto trading, a report said.
- The S&P 500 is enjoying one of the best years since 1927 thanks to the AI buzz.
- Dan Loeb hailed AI as a decade-defining technology like the internet and PC.
In commodities, bonds, and crypto:
- Oil prices climbed, with West Texas Intermediate up 0.05% to $81.38 a barrel. Brent crude, the international benchmark, inched higher 0.09% to $84.98 a barrel.
- Gold edged higher 0.15% to $1,981.00 per ounce.
- The 10-year yield ticked higher 3 basis points to 4.084%.
- Bitcoin moved higher 0.52% to $29,393.01.