American Stocks: Credit Rating Challenges by Fitch and the Impact of Earnings Season

Futures for American stock indices declined on Tuesday night after credit rating agency Fitch downgraded the long-term U.S. credit rating to AA+ from AAA, coinciding with traders continuing to assess the latest batch of second-quarter 2023 earnings results. Dow Jones Industrial Average futures dropped by approximately 103 points or 0.29%. Similarly, S&P 500 futures and Nasdaq 100 futures declined by 0.44% and 0.63%, respectively.

This came as Fitch revised its long-term credit rating for the United States due to its pessimistic outlook on the expected financial deterioration over the next three years.

This news followed a slight decline in the S&P 500 index by 0.27% yesterday, while the Nasdaq fell by 0.43%. On the other hand, the Dow Jones index rose by about 71.15 points or 0.2%, reaching its highest level since February 2022. This occurred as the earnings season was approaching its end, with results being stronger than anticipated.

Consequently, over the past five or six weeks, the American stock market has demonstrated resilience and ability to withstand adverse economic conditions by achieving high earnings results amidst market and global financial uncertainties. This makes the prospects for a rise in American stock indices likely to persist,

possibly extending into early 2024. These expectations are gaining significant momentum among investors at the moment.

Now, the markets are eagerly awaiting the second-quarter results of Apple (AAPL) and Amazon (AMZN), which are scheduled to be released tomorrow, Thursday. Both stocks have risen by more than 50% so far and during 2023. Investors are also looking forward to key data releases this week, notably the U.S. jobs report on Friday. This follows a strong month for American stock indices in July, as the S&P 500 and Nasdaq concluded the fifth consecutive month of substantial gains.