The Fitch downgrade of the US today is major news and comes almost exactly 12 years after Standard & Poors cut the US to AA+. That move came late on a Friday afternoon and the market had the weekend to digest it. The extra time didn't provide any great solace as the S&P 500 fell to 1119 from 1199 and closed on the lows.
Notably, that news hit the market in a vulnerable state after two weeks of heavy selling.
In the FX market, the reaction was more mixed as the US dollar selling impulse was met by buying due to the flight to safety. The euro debt crisis was also brewing so the euro had problems of its own.
Impressively, US bonds rallied on the day after the downgrade as the flight-to-safety bid overwhelmed any selling due to the downgrade.
A big winner last time was gold, which rallied and continued to rally afterwards, hitting eventually what would be a long-term high.
Of course, every situation is different and perhaps this time a US downgrade isn't so 'unthinkable'. In any case, it helps to keep the history in mind.
