Morning Bid: Markets shake off surprise US credit downgrade

A look at the day ahead in European and global markets from Brigid Riley

with an unexpected downgrade of the U.S. government's credit rating, by one notch to AA+ from AAA, citing concerns over governance and U.S. debt.in response to the move, which came months after the Biden administration scraped together a deal with conservative lawmakers to avoid a debt ceiling crisis.U.S. Treasury yields eased back a touch as investors ironically sought the safety of U.S. sovereign debt, while the dollar also benefited, ticking up against a basket of major peers.

The reaction was a little more pronounced in equities, with S&P 500 and NASDAQ futures slipping around 0.5% each.suffered a 1.8% drop, but that's after hovering near post-Bubble highs for most of the past two months. Chinese markets also took a big hit, led by a 2% drop for Hong Kong's Hang Seng. But again, these are markets that had been supported by now-waning hopes for big-bang economic stimulus from Beijing.

China's post-pandemic economic recovery is looking increasingly shaky, judging from the data, with factories and services activity adding to the

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