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US stocks continued to slide Thursday following Fitch’s US credit downgrade.
The hit to America’s credit rating also caused bond yields to jump.
Meanwhile, investors are waiting on earnings from mega-cap tech firms Apple and Amazon.
US stocks fell further on Thursday as bond yields continued to climb following Fitch’s US credit downgrade earlier this week.
The rating agency slashed the US’s long-term credit rating from the top-tier AAA score to AA+ late Tuesday. The 10-year Treasury yield rose further above the 4% level as bond prices slumped.
But some Wall Street commentators have been puzzled over the sudden downgrade, with Larry Summers, Warren Buffett, and Jamie Dimon among those who have brushed off the move as “bizarre” and “ridiculous.”
“Fitch’s downgrade reflects a reality that investors have already learned to accept so, while today’s equity market response was negative, it does not add anything new to the discussion,” DataTrek co-founder Nicholas Colas said in a note Thursday morning. “US equity markets are already on unsteady ground and could continue to be so for another month or two. We should not therefore be too surprised at today’s price action.”
Investors are also waiting for more earnings to roll out from mega-cap tech firms. Apple and Amazon, which have rallied 54% and 49% respectively since the start of the year, are set to report their financials after the closing bell.
Here’s where US indexes stood shortly after the 9:30 a.m. ET opening bell on Thursday:
S&P 500: 4,491.63, down 0.48%Dow Jones Industrial Average: 35,143.19, down 0.39% (139.33 points)Nasdaq Composite: 13,923.32, down 0.36%
Here’s what else is happening this morning:
Warren Buffett shrugged off Fitch’s US credit downgrade, and said he bought up $10 billion US Treasuries on Monday.The January 6 riot factored into Fitch slashing America’s credit score. Bill Ackman said he’s betting against 30-year Treasurys to hedge against stubborn inflation.Uber reported its first quarterly profit ever this week. Here’s how it got there.
In commodities, bonds and crypto:
West Texas Intermediate crude oil inched higher 0.81% to $80.13 per barrel. Brent crude, oil’s international benchmark rose 0.78% to $83.85.Gold slipped 0.03% to $1,933 per ounce.The yield on the 10-year Treasury rose 10 basis points to 4.179%.Bitcoin declined 0.92% to $29,131.17.