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Wall Street fell on Wednesday after rating agency Fitch’s move to downgrade the U.S. government’s credit rating hit appetite for risky assets around the world.

Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years as well as a growing general government debt burden, making it the second major rating agency after Standard & Poor’s move in 2011 to strip the country of its triple-A rating.

The yield on U.S. 10-year Treasury notes rose to 4.07%, after briefly slipping earlier in the day.

Safe havens gold and the Japanese yen rose, while the dollar index climbed 0.5%.

Several major brokerages said Fitch’s downgrade was unlikely to result in a sustained drag on U.S. financial markets, noting that the economy was stronger than in 2011.

“Certainly markets haven’t reacted anything like they did back in 2011, but as investors come in and look at what’s going on, it makes them a little uncomfortable and the natural reaction is to simply hit sell,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab.

“Markets are also a bit stretched to the upside and are also probably due for some pullback.”

At 9:39 a.m. ET, the Dow Jones Industrial Average was down 124.43 points, or 0.35%, at 35,506.25, the S&P 500 was down 35.45 points, or 0.77%, at 4,541.28, and the Nasdaq Composite was down 185.63 points, or 1.30%, at 14,098.28.

Megacap stocks including Tesla, Nvidia, Meta Platforms and Apple fell between 1.3% and 1.8%.

Meanwhile, the ADP National Employment report showed private payrolls increased more than expected in July, pointing to continued labor market resilience that could shield the economy from a recession.

U.S. second-quarter earnings are now expected to fall 5.9% from a year earlier, as per Refinitiv data, compared with a 7.9% decline estimated a week earlier.

The benchmark S&P 500 and tech-heavy Nasdaq took a breather in the previous session as investors entered a seasonally slow August.

CVS Health Corp added 1.8% on beating Wall Street estimates for quarterly profit, boosted by strength in its pharmacy benefit management unit and lower-than-expected medical costs in its health insurance business.

DuPont de Nemours fell 1.7% on reporting a 7% fall in quarterly revenue due to weakness in the electronics and industrial unit.

Emerson climbed 4.9% after the industrial software firm raised its annual profit outlook as companies increase spending on automation in response to a tight labor market.

Wells Fargo said it expects to pay as much as $1.8 billion to help replenish a government deposit insurance fund that was drained of $16 billion this year after three banks collapsed, sending its shares 1.4% lower.

Advanced Micro Devices shed 1.0%, after opening higher on forecasting an upbeat finish to the year and on plans to launch AI chips that could compete with market leader Nvidia.

Declining issues outnumbered advancers by a 6.59-to-1 ratio on the NYSE and a 3.61-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and four new lows, while the Nasdaq recorded 24 new highs and 40 new lows.

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