U.S. stock futures fell sharply on Sunday following the steepest weekly retreat since 2008 as traders reacted to Standard & Poor's downgrade of America's credit rating and ongoing concerns over the euro zone debt crisis.
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Asian markets were under pressure in early trading as well. The Japanese Nikkei 225 slid 1.2% to 9,184 and the Chinese Hang Seng plummeted 2.7% to 20,375.
For the first time in history, S&P cut America's top-notch credit rating one notch to AA-plus from AAA after the close of trading on Friday. The ratings company also said it may slice the ratings another notch over the next two years.
The move came as a result of concerns over the country's substantial public debt burden and deep divides within Congress that almost sparked an unprecedented default on U.S. sovereign debt. Moody's Investor Service, another ratings company, affirmed American's AAA rating, while Fitch is still performing a review.
The response by large investors has been mixed.
BlackRock said Sunday the move by S&P "does not imply a fundamental increase in risk" and shouldn't prompt investors to "change their behavior solely on the downgrade." However, the company that manages $3.7 trillion in assets warned that "continued economic weakness and regulatory uncertainty ... may provide a signal to some investors to reassess their risk appetite."
Meanwhile, traders were paying close attention to the expanding euro zone debt crisis. The European Central Bank said Sunday it was prepared to "actively implement" a program by which it would purchase Italian and Spanish debt. European credit markets have been rattled as debt worries have cascaded from smaller economies like Greece to more substantial ones like Italy.
The Group of 7 finance ministers also made a statement late Sunday, saying it was prepared to take whatever steps are necessary to calm global markets that were slammed last week.
The broad S&P 500 plunged 7.2% last week -- the worst performance since November 2008, during the financial crisis.
In a sign of the uneasiness on Wall Street, gold, seen as a safe haven, jumped $36.20, to 2.1%, to $1,686 a troy ounce. Energy markets were deep in the red in electronic trading on Sunday.
Light, sweet crude dipped $2.63, or 3%, to $84.25 a barrel. Wholesale RBOB gasoline slid 5 cents, or 1.5%, to $2.75 a gallon.
The U.S. dollar slumped 0.43% against a basket of world currencies, while the euro gained 0.22% against the greenback.