U.S. stock futures saw a slight decline on Sunday night as Moody's Investors Service revised its U.S. credit rating outlook to negative from stable. This downgrade comes amidst concerns over "very large" fiscal deficits and partisan gridlock in Washington, according to Moody's. The move by the ratings agency follows a similar downgrade in the U.S. long-term foreign currency issuer default rating by Fitch three months ago.

Dow Jones Industrial Average futures dipped by 43 points, or 0.1%, while futures tied to the S&P 500 and Nasdaq-100 also shed 0.1%. Although Moody's reaffirmed America's credit rating at AAA, the highest level, the downgrade in the credit rating outlook highlights the challenges faced by the U.S. government in addressing its fiscal deficits and debt burden.

The lowered credit rating outlook is particularly relevant in terms of its impact on the attractiveness of U.S. debt for foreign investors. Jay Hatfield, CEO at Infrastructure Capital Management, emphasized the broken budget process in the U.S. as the main factor for the downgrade, expressing concern over the global perception of this instability.

Investors are also keeping a close eye on upcoming economic data, including October's monthly federal budget and the Federal Reserve Bank of New York's October consumer expectations survey. Fed Governor Lisa Cook is set to deliver remarks on Monday morning. The release of the monthly consumer price index data on Tuesday is also anticipated.

Furthermore, the tech sector continues to experience the effects of a transition from a "zero interest rate policy" era, as suggested by Bank of America's technology, media, and telecommunications team. This unwinding process is expected to extend into 2024, impacting the earnings dynamics of various tech companies. The reliance on low-margin revenue growth has created distortions in valuations and management strategies, affecting software, internet, e-commerce, and streaming companies in particular.

Looking ahead, Morgan Stanley predicts that U.S. GDP growth will slow down in the coming year. The firm also anticipates the Federal Reserve to maintain rates at 5.375% until June 2024, followed by rate cuts. The expected slowdown in growth raises concerns about a potential recession, although a soft landing is still forecasted.

Amidst Moody's downgrade and the ongoing challenges in the tech sector, U.S. stock futures indicated a cautionary start for the week. Maintaining a steady focus on economic indicators and fiscal policies will be decisive factors for market sentiment and future growth prospects.

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