Fitch downgrades U.S. credit rating, AMD's AI chip plans - what's moving markets

investing.com:

Investing.com -- U.S. stock futures fall after Fitch lowers its U.S. credit rating, flagging worries over Washington's ability to resolve pressing fiscal issues in the wake of a tense debt-limit standoff earlier this year. Elsewhere, semiconductor firm Advanced Micro Devices predicts that the planned launch of its new artificial intelligence chips will drive earnings higher this year, while Starbucks sees demand for its coffee and food offerings slow in North America.

1. Fitch downgrades U.S. credit rating

Fitch has lowered its rating of U.S. debt to AA+ from the top tier level of AAA, citing concerns over a rising debt burden and eroding confidence in Washington's leadership, only months after lawmakers brought the world's largest economy to the brink of a sovereign default.

The downgrade, which is the first by a major ratings agency in over a decade, points to fears that repeated political standoffs over the debt limit could threaten the stability of the $25 trillion global Treasury market. Treasuries have typically been seen as a safe-haven asset backed by trust that America will pay back its obligations, and this faith has helped to underpin U.S. debt as a benchmark for stocks and other bonds.

While Fitch's move is not expected to immediately alter this role, it does raise some questions around America's reputation for reliability. In a statement on Tuesday, the ratings firm argued that there has been «a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters.»

Fitch also predicted that the general government deficit will climb to 6.3% of gross domestic product in 2023, up from 3.7% in 2022, «reflecting weaker federal revenues, new spending initiatives and a