Fitch Ratings put the US government's "AAA" credit rating on 'rating watch negative' Tuesday, saying that the standstill on the U.S. debt ceiling negotiations risks undermining the effectiveness of the country's government and political institutions.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the rating agency wrote in a statement.
S&P 500 futures fell 9.6 points while Dow Jones industrial average futures sank 60 points and Nasdaq 100 futures fell 7.5 points.
A Treasury Department spokesperson said the Fitch move reflected an urgent need for Congress to act on the debt ceiling.
Earlier today Senate Majority Leader Harry Reid lashed out at House Republicans, shortly after the collapse of a rival GOP proposal.
He warned at the time that the U.S. credit ratings could be downgraded as soon as Tuesday night.
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