(Bloomberg) — Global equities dropped as Fitch Ratings’ downgrade of US government debt spurred a rapid retreat from riskier assets and anxiety over this year’s spectacular rally in tech stocks.
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Nasdaq 100 futures slid 0.8%, signaling a pullback later Wednesday for a market that has surged 44% in 2023. Broad losses in Europe dragged all industry groups in the benchmark regional index into the red.
Fitch stripped the US of its top-tier rating, criticizing the ballooning fiscal deficit and an “erosion of governance.” The downgrade serves up an extra dose of jeopardy for equity investors already concerned over the risks of recession and whether this year’s run-up in stocks is sustainable. Treasuries were steady, in keeping with Treasury Secretary Janet Yellen’s assertion that they remain “the world’s preeminent safe and liquid asset.”
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