The Dow Jones returned 0.98%, the Nasdaq index slipped 2.17% and the broader S&P 500 index fell 1.38%.

The Dow Jones remained on 16 positive sessions in 17 trading days.

"The time had come for a correction for the market," commented Quincy Krosby of LPL Financial and "the Fitch report was the trigger for this turnaround."

The financial rating agency downgraded the United States' rating by one notch on Tuesday from AAA, the highest, to AA+.

A decision justified, according to Fitch, by the repeated political crises around the budget and debt, and concerns about the acceleration of public spending.

The New York market has become somewhat tense, the VIX index, which measures the nervousness of operators, rising to its highest level in a month, even if it remains low on historical average.

In a sign that this announcement was an excuse for Wall Street to consolidate rather than a shock, the bond market reacted with phlegm.

The yield on 10-year US government bonds only tightened slightly, to 4.07%, against 4.04% the previous day at the close.

"What Fitch said is important, (...) but Moody's has not followed, for the moment, while they have a higher weight in the market, "argued Quincy Krosby to explain the weak reaction of investors, while an equivalent decision of the agency Standard and Poor's, in August 2011, had caused an earthquake.

Moody's, the third major agency with S&P and Fitch, still gives the United States its maximum rating, Aaa, with a stable outlook, which means that it does not envisage a short-term downgrade.

The New York Stock Exchange found no comfort in the ADP report, which showed that 324,000 jobs had been created in July in the private sector, almost double the 190,000 jobs expected by economists.

"Wall Street tends to ignore the ADP report, especially because its new (counting) methodology is only a year old," Oanda's Edward Moya said in a note about an indicator traditionally considered unreliable.

The lower risk appetite generated by Fitch's announcement and the small rise in rates worked against equities, especially the giant capitalizations of the technology sector.

The darling of artificial intelligence (AI), Nvidia, slipped (-4.81%), as did Microsoft (-2.63%), Meta (-2.60%) or Amazon (-2.64%), which publishes its results Thursday, after trading, just like Apple (-1.55%).

On the Dow Jones side, some so-called defensive stocks, i.e. less sensitive to the economic situation, shone, such as Johnson & Johson (+0.65%) or Coca-Cola (+0.36%).

Starbucks also did well (+0.86%), despite revenues below expectations in the second quarter. While international sales have recorded significant growth, the average amount per order has slowed down, even falling in China.

Elsewhere on the list, the semiconductor manufacturer AMD fell (-7.02%) despite results above consensus, and cautiously optimistic forecasts.

Investors felt that these figures were not enough to justify the valuation of the stock, which has doubled since October.

The Italian car manufacturer Ferrari (-1.28%), listed in New York, did not benefit from better-than-expected quarterly results and the increase in its forecasts for the year. The new earnings projection, however, is only an alignment with those of analysts.

The Israeli laboratory Teva, listed on Wall Street, jumped (+11.58%) after reporting a higher than projected turnover by the New York market, in particular thanks to its treatment against Huntington's disease, a degenerative neurological condition.

© 2023 AFP