US Stocks Close Lower After Fitch Downgrades Credit Rating; Amazon Soars While Apple Stumbles in Volatile Earnings Week

The stock market ended lower on Friday, marking the conclusion of a week characterized by high volatility. This decline occurred after Fitch downgraded the U.S. credit rating from its premier AAA level, sparking fluctuations in U.S. Treasury yields.

Changes in Treasury Yields

The yield of the 10-year Treasury witnessed an approximate dip of 13 basis points, finishing the week at 4.06%. This reduction came after a temporary climb to nearly 4.2%. The decline in the U.S. credit rating influenced this fluctuation.

Earnings Season Effects

The last day of this tumultuous week also marked the end of the second quarter’s busiest earnings season. “Notable moves included Amazon’s shares jumping over 8% to their highest in almost a year, spurred by a robust ‘beat and raise’. On the flip side, Apple experienced a near 5% decrease after revealing lower revenue compared to the same quarter last year.

Market Resilience and Future Outlook

“During the week, the market managed to recover from the blow of the U.S. sovereign debt rating cut, and we expect it will also endure Apple’s subdued outlook. We predict a slight downturn in the short term, before an upward trajectory towards record highs later this year,” Alex King from Cestrian Capital Research explained to Seeking Alpha.

Week’s Stock Market Recap

Over the course of the week, the Dow fell by 1.1%, while the S&P 500 and the Nasdaq declined by 2.3% and 2.8% respectively. Catch up with the major stock market activities to look forward to in the upcoming week in Seeking Alpha’s Catalyst Watch.