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Stocks fall, Treasuries gain after Fitch downgrades US rating

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Asian stocks traded lower while U.S. Treasury yields declined on Wednesday, after ratings agency Fitch unexpectedly downgraded the United States' top-tier sovereign credit rating.

Asian stocks were also weighed by declines on Wall Street overnight. U.S. stock futures, the S&P 500 e-minis , pointed 0.2% lower on Wednesday.

"It's kind of a short-term knee-jerk reaction, so we will have to wait and watch for how this pans out." The U.S. dollar moved lower against a basket of major currencies immediately after the announcement, but was up 0.1% as of the Asian morning. "This basically tells you is the U.S. government’s spending is a problem. It's an unsustainable budget situation because the economy can't even grow its way out of this problem going forward," said Steven Ricchiuto, U.S. chief economist, Mizuho Securities. "Therefore, they're going to have to either tackle it or accept the consequences of potential further additional downgrades.

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