NDX Nasdaq100 Fell 8.60% After the Last U.S. Credit Downgrade

itch Ratings downgraded the US debt rating on Tuesday, moving it from the highest AAA rating to AA+, citing concerns about "a steady deterioration in standards of governance."

This downgrade happened following last-minute negotiations among lawmakers to reach a debt ceiling deal earlier this year, raising the risk of the nation's first default.

In the past, a similar credit downgrade had a significant impact on the NDX, which fell 8.60% in just two weeks. Back in August 5, 2011, Standard & Poor's, one of the major credit rating firms, downgraded U.S. debt after another major debt ceiling battle.

Jim Reid, a strategist at Deutsche Bank, pointed out that while the news of Standard & Poor's being the first to downgrade 12 years ago was substantial, investors had already adjusted their perceptions of the world's most important bond market, recognizing that it was no longer a pure AAA. Nonetheless, Fitch's recent decision to downgrade is still significant.

In the current scenario, the U.S. 10-year Treasury yield has risen to 4.15%, reaching its highest level since November 2022.

As for the price target for this year, it remains at $16650, as shown in the chart below:

Looking forward to read your opinion about it!

Trade active:

NDX following the trendline.

Trade closed: target reached:

NDX reached $14063 on Oct 26, reaching the price target! So that U.S. Credit Downgrade statistic really worked.