Stock futures slide after Fitch's U.S. downgrade sours the market mood

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Stock futures lurch lower after the European open, following Fitch downgrade

U.S. stock futures stumbled Wednesday after markets were rattled by a downgrade to the U.S. government’s credit rating.

What’s driving markets Equity-index futures are succumbing to a broad risk off tone across markets after rating agency Fitch downgraded the U.S.’s credit rating from AAA to AA+, citing “expected fiscal deterioration” and an “erosion of governance”. The news found a stock market arguably vulnerable to unwelcome surprises, with the S&P 500 having already gained 19.2% this year and the tech-heavy Nasdaq Composite up 36.5%.

Traditional perceived havens saw demand, with the Japanese yen USDJPY, -0.71% gaining 0.7%, gold GC00, +0.49% nudging up to $1,950 an ounce, and benchmark German government bond yields BX:TMBMKDE-10Y moving lower. U.S. 10-year Treasury yields BX:TMUBMUSD10Y were little changed at 4.03%.“While debt downgrades seldom, if ever, have long legs, investors may pause and let the dust settle before re-entering risk markets.

 

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