Markets Tumble at Midday After Fitch Cuts US Credit Rating

U.S. equities sank at midday as the market reacted after Fitch cut the U.S. credit rating to AA+ from AAA. In addition, a higher-than-expected increase in private sector job creation added to concerns about rising interest rates. The Nasdaq dropped 2%, the S&P 500 lost 1%, and the Dow fell 0.6%. The yield on the 10-year Treasury note jumped.  

Tech stocks, which become less attractive when borrowing costs increase, tumbled. Shares of Meta Platforms (META) dipped 3%, and those of all the other FAAMG stocks were down more than 1%. Shares of Intel (INTC), Salesforce (CRM), and Tesla (TSLA) were lower. 

Generac Holdings (GNRC) shares plunged as the backup power equipment provider warned of falling consumer demand. Shares of SolarEdge Technologies (SEDG) cratered after the solar power company said its U.S. business faced headwinds because of rising interest rates. Shares of others in the renewable energy sector declined as well. Oil futures dropped, sending shares of energy firms, including Chevron (CVX) and Exxon Mobil (XOM), sliding.

CVS Health Corporation (CVS) shares jumped after the pharmacy chain and healthcare company’s results beat estimates as it slashed costs. Shares of rival Walgreens Boots Alliance (WBA) also moved higher. Shares of Humana (HUM) rose as the health insurer exceeded profit forecasts as payments to cover non-urgent surgeries was less than expected. 

Gold prices lost ground. The U.S. dollar advanced versus the euro, pound, and yen. Trading in major cryptocurrencies was mixed.