As a result of recession and its aftershock impact
It was not a surprise to others because the agency had already warned about the credit downgrading if the government didn't take possible measures. Therefore, the United States senators tried their best and took careful steps to improvise the credit ratings and economy of US, so as to avoid the effects of this down-gradation in credit rating.
The S&P downgrading of America's credit rating has influenced the world. It was in a matter of discussion that Europe might get affected by the downgrading. Hence, this kind of alteration will affect the global market as well the world economies. As a consequence of downgrade, the commodity market was also got affected upto certain extend.
Talking about the oil prices is a worthless task if it has dropped up to 20% after S&P shift. It is a matter of concern that the prices of oil have touched the lowest levels especially in last eight months. In a provision to lower the influence of credit downgrading, many investors are looking for investing in gold and treasury bonds.
After the Standard and Poor's (S&P) credit rating of US, it was a concern that the US market will sink into recession. However, Brent was floating around $100 as well WTI was below $80. The Down Jones dropped more than 5% without increasing the concerns about the credit rating.
On the positive nodes, it's great to know that decreasing crude prices will transform into cheaper gas at the pump. Hence, such depletion will reduce airline tickets as well turn down transport rates. Owing to severe economy, many people have to cut down the budget. They believe in saving and cutback. One reason for declining oil prices can be passed to the country's credit downgrading. At present, the prices of oil have dropped up to 20% and influenced everything.
To detect influence of downgrading, one can easily compare stocks of different companies that are a good indicator of economic confidence. Despite the United States is facing recession and credit downgrading, everybody is in hope for the economic gradation.