Stock indices finished today’s trading session in the red as the U.S. credit rating downgrade rattled investors. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell by 2.21%, 1.38%, and 0.98%, respectively.
The technology sector (XLK) was the session’s laggard, as it fell 2.49%. Conversely, the consumer staples sector (XLP) was the session’s leader, with a gain of 0.31%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.07%. On the other hand, the Two-Year Treasury yield decreased, as it hovers around 4.89%. This brings the spread between them to -82 basis points.
In addition, the market appears to be maintaining its conviction of a fed funds rate in the range of 5.25% to 5.5% for December 2023. Indeed, investors are pricing in a 64.3% probability of this happening.
Last updated: 12:00PM EST
Indices continue to slide so far in today’s trading session. At the time of writing, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 2.1%, 1.2%, and 0.7%, respectively. Furthermore, although oil is down today, it has seen a strong rally in recent weeks. This has led to higher gasoline prices.
Indeed, the national average for regular gas was last $3.803 per gallon, up from last week’s reading of $3.687. The highest prices can be found in California, where prices are substantially higher than the national average, at $5.025 per gallon. On the other hand, Mississippi is the state with the lowest gas prices, at $3.308 per gallon.
Last updated: 9:30AM EST
Stocks opened lower on Wednesday after the credit rating downgrade from Fitch, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) all down by 1.18%, 0.8%, and 0.42%, respectively, at 9:30 a.m. EST, August 2.
Meanwhile, the July ADP jobs report indicated that 324,000 private sector jobs were added in July, above the consensus forecasts of 185,000 jobs but below 455,000 jobs added in June. This report indicated that the job market still remained hot and is not cooling much.
First published: 4:22 AM EST
U.S. futures slipped on Wednesday morning after rating agency Fitch downgraded the credit rating for the United States to AA+ from AAA, citing anticipated fiscal deterioration over the next three years.
Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were down 1.28%, 0.96%, and 0.71%, respectively, at 4:19 a.m. EST, August 2.
The rating agency added that the repeated “political standoffs and last-minute resolutions” associated with debt ceiling negotiations impacted confidence in the country’s fiscal management. Treasury Secretary Janet Yellen strongly disagreed with the downgrade and called it “arbitrary.”
Meanwhile, after ending July on a strong note, major indices closed mixed on the first day of August. The ISM Manufacturing Purchasing Managers’ Index data released on Tuesday indicated continued contraction in July, while the Jolts report disclosed lower-than-anticipated job openings in June.
Key economic releases on Wednesday include the ADP jobs report, which indicates the monthly change in non-farm, private employment in the U.S. The previous report revealed that private sector jobs surged by 497,000 in June, way ahead of expectations. For July, experts anticipate 175,000 private job additions. A stronger-than-anticipated job market could imply the need for further rate hikes to tame inflation.
On the earnings front, stocks in focus include chip maker Advanced Micro Devices (AMD), which delivered upbeat second-quarter results, and SolarEdge Technologies (SEDG), which plunged after reporting mixed results for the June quarter and a weak outlook. Meanwhile, shares of e.l.f. Beauty (ELF) rallied in reaction to improved guidance and market-crushing Fiscal Q1 performance, while the stock of dating app company Match Group (MTCH) jumped on a Q2 earnings beat.
Some of the key earnings lined up for Wednesday include CVS Health (CVS), Qualcomm (QCOM), Shopify (SHOP), PayPal (PYPL), Etsy (ETSY), and MGM Resorts (MGM).
Elsewhere, European indices were in the negative territory amid the U.S. rating downgrade and the ongoing earnings season.
Asia-Pacific Markets Ended Lower on Wednesday
Asia-Pacific indices ended in the red on Wednesday in reaction to Fitch’s credit rating downgrade for the U.S.
Hong Kong’s Hang Seng and China’s Shanghai Composite and Shenzhen Component indices finished lower by 2.47%, 0.89%, and 0.35%, respectively.
Japan’s Nikkei fell 2.3% on Wednesday, while the Topix index declined 1.52%.
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