Global markets update: US stocks slump after Fitch cuts US credit rating

Rating agency Fitch on Tuesday downgraded US debt rating to AA from AAA.

It said that expected fiscal deterioration over the next three years and repeated down-to-the-wire debt ceiling negotiations threaten the US  government’s ability to pay its bills.

The S&P 500 shed 63.34 points, or 1.38%, at 4,513.39. The Dow Jones Industrial Average fell 348.16 points, or 0.98%, at 35,282.52. The Nasdaq Composite sank 310.47 points, or 2.17%, at 13,973.45.

Shares of Generac Holdings tumbled 24.4% after it reported weaker profit.

SolarEdge Technologies fell 18.4% after reporting weaker profit and revenue growth than expected.

CVS Health climbed 3.3% after reporting a milder fall in results.

Humana surged 5.6% after it beat profit forecast. 

The yield on the 10-year US treasury rose to 4.07% from 4.04% late Tuesday.

Currencies

The US dollar slipped at 143.28 Japanese yen from 143.42. The euro fell at $1.0943 from $1.0975.

Europe

European equities tumbled on Wednesday, after a downgrade of the US credit rating by Fitch.

The pan-European STOXX 600 index fell 1.4%.

Britain’s FTSE 100 shed 1.4% at 7,561.63.  Germany’s DAX lost 1.4% at 16,020.02. France’s CAC 40 was down 1.3% at 7,312.84.

Telefonica Deutschland plunged 17.9% after rival Vodafone announced a roaming deal with 1&1 in Germany.

Siemens Healthineers fell 5.6% after its quarterly profit dropped.

German fashion brand Hugo Boss slid 1.9% despite it raised its full-year outlook. 

Asia

In Asia, stock markets closed down on Wednesday.

Hong Kong’s Hang Seng index dipped 2.5% at 19,517.38. China’s Shanghai Composite lost 0.9% at 3,261.69. 

Japan’s Nikkei 225 tumbled 2.3% at 32,707.69. 

Australia’s S&P/ASX 200 index closed 1.3% lower at 7,354.7 points. New Zealand’s benchmark S&P/NZX 50 index ended 0.2% lower at 11,962.04 points.

Energy prices

Brent crude for October delivery fell $1.71 at $83.20 a barrel on Wednesday. US crude oil benchmark for September delivery lost $1.88 at $79.49 a barrel.

Natural gas for September delivery lost 8 cents at $2.48 per 1,000 cubic feet.

Bullion

Gold for December delivery dropped $3.80 at $1,975 an ounce. Silver for September delivery fell 46 cents at $23.87 an ounce.

Updated: 03 Aug 2023, 02:21 AM IST