Entering trading on Wednesday, US markets were down after Fitch downgraded US long-term credit, causing the Dow Jones to drop 155 points (0.4%), the S&P 500 to drop 0.8% and the Nasdaq Composite to drop 1.1%.
While the credit rating downgrade made headlines, Treasury yields remained relatively stable and the impact on the US dollar was minimal.
Fitch attributed the downgrade to the recent debt ceiling impasse, but market experts are unsure of its potential long-term effects. Traders are closely monitoring the ongoing second quarter earnings reports.
Match Group, the parent company of Tinder and Hinge, caught investors’ attention when its shares rose about 5.2% following better-than-expected earnings and positive future guidance. In contrast, SolarEdge Technologies saw a sharp drop of more than 16% after missing revenue expectations.
CVS also saw a slight drop of about 1% in its stock, despite beating earnings and revenue expectations. The company’s recent announcement of a cost-cutting plan, which includes laying off 5,000 employees, may be contributing to the market response.
In economic news, private sector companies added more jobs than expected in July, with about 324,000 jobs added, exceeding analyst projections of about 189,000 jobs. The strong jobs report may indicate a possible increase in interest rates by the Federal Reserve at its next meeting in September.
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