Fitch downgrades the U.S. credit rating over recent debt-ceiling standoffs and AMD shares rise after its earnings report highlights its AI products. Here’s what investors need to know today.
1. Fitch Ratings Downgrades US Credit Rating Over Debt Limit Standoffs
The Fitch Ratings agency downgraded the U.S. government’s credit rating to AA+ from AAA, the top grade, as the agency said the government’s growing debt and history of debt-ceiling standoffs make it an increasing credit risk. The move follows a 2011 downgrade of the U.S. credit rating following political standoffs over the budget and debt and could impact the $25 trillion global market for U.S Treasurys.
2. AMD Shares Rise on Earnings Report Highlighting AI Products
Advanced Micro Devices (AMD) shares were up 1% in pre-market trading after it reported second-quarter earnings of $0.58 a share, one cent better than analysts had forecast, while its revenue of $5.36 billion was $60 million above the analyst call. Investors reacted to the chipmaker’s report on artificial intelligence (AI) products tracked to launch in the fourth quarter, along with its projections for AI-powered data centers to reach over $150 billion in revenue by 2027.
3. Starbucks Shares Fall As Worldwide Sales Fail to Meet Expectations
Shares of Starbucks Corp. (SBUX) fell 2% in the pre-market after the coffee retail chain missed analysts’ expectations for its third-quarter same store sales and revenue, despite increasing 46% sales in China. Worldwide same-store sales rose 10%, where analysts were looking to see an 11% increase, while the coffee retail chain reported earnings of $1 a share for its third quarter, compared with $0.79 for the same period last year, and the $0.95 that analysts forecasted.
4. Shares of Video Game Maker Electronic Arts Drop After Weaker-Than-Expected Guidance
Shares of Electronic Arts (EA) were down 4.5% in pre-market trading after its current quarter forecast for revenue was in line with what analysts were expecting. The video game maker reported earnings of $1.14 a share for the June quarter, compared with analysts’ forecast of $1.02 a share, while giving a revenue guidance in the range of $1.7 billion to $1.8 billion, slightly shy of the analyst consensus of $1.8 billion.
5. ADP Report Expected to Show Private Sector Job Drop Ahead of Friday’s Payroll Report
Investors will get another piece of data on the U.S. labor market today at 8:15 a.m. ET when the ADP National Employment Report is expected to show 175,000 private sector jobs created in July, down from the surprise 497,000 new jobs in June. It’s part of a string of employment reports this week, including yesterday’s data that showed a June drop in job openings, and Friday’s U.S. payroll report.