European Shares Set To Follow Asian Peers Lower After US Rating Downgrade

European stocks may drift lower on Wednesday after Fitch Ratings downgraded the U.S. credit rating by one notch to AA+, citing high debt burden at the federal, state, and local levels and a concerning decline in governance standards over the last two decades.

Asian markets fell sharply, and U.S. stock futures declined on concerns over the state of the U.S. finances.

Technology stocks were seeing heavy declines in Asia after stellar gains through July.

Gold benefited from a weaker dollar while oil prices rose about 1 percent in Asian trade after industry data showed a sharp drop in U.S. crude stocks last week.

A report on U.S. private sector employment may attract attention later today ahead of the more closely watched nonfarm payroll report due Friday.

On the earnings front, Advanced Micro Devices reported better-than-expected quarterly results in after-hours trading on Tuesday while Starbucks missed market expectations for quarterly comparable sales.

U.S. stocks ended mostly lower overnight as caution crept in ahead of key earnings and the U.S. jobs data due this week.

In economic releases, U.S. manufacturing activity contracted for the ninth consecutive month in July and construction spending rose by slightly less than expected in June while job openings fell to the lowest level in more than two years in June, separate reports showed.

The tech-heavy Nasdaq Composite gave up 0.4 percent and the S&P 500 eased 0.3 percent while the Dow edged up 0.2 percent to reach its best closing level in well over a year after Caterpillar reported strong second-quarter profits.

European stocks closed lower on Tuesday as weak manufacturing PMI data from Asia, Europe and the U.S. revived growth worries.

The pan European STOXX 600 fell 0.9 percent in its biggest single-day percentage loss in nearly a month.

The German DAX lost 1.3 percent, France's CAC 40 shed 1.2 percent and the U.K.'s FTSE 100 dropped 0.4 percent.

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