Fitch Ratings has put the AAA-rated long-term foreign-currency issuer default rating of the United States on a 'negative watch' as the impasse over raising the debt ceiling continues, just a week ahead of the June 1 deadline.

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The ratings agency pointed to 'brinksmanship' over the debt ceiling as a factor behind its actions. Brinksmanship is the art or practice of pursuing a dangerous policy to limits of safety before stopping.

“The Rating Watch Negative reflects increased political partisanship that is hindering reaching a solution to raise or suspend the debt limit despite the fast-approaching x date,” the rating agency said.

Before a rating is formally upgraded or downgraded, it is often put on a "positive" or "negative watch," which in a way is a warning to investors that an action may take place unless the situation changes drastically.

The move comes just a week ahead of the June 1 deadline that Treasury Secretary has been consistently reiterating, saying that missing the deadline would lead to "widespread chaos."

“We believe risks have risen that the debt limit will not be raised or suspended before the X-date and consequently that the government could begin to miss payments on some of its obligations,” the rating agency said.

House Speaker Kevin McCarthy on Wednesday said that talks over the debt limit continued to progress but both sides remain at loggerheads over spending. Republican leaders sent the House of Representatives home for the holiday weekend, but put members on notice that they could be called back for a vote. McCarthy also said that the GOP and the White House "have time" to iron out a deal.

Due to similar reasons, Fitch Ratings in 2013 had also warned of cutting the US credit rating. In October 2013, Dagong Global Credit Rating downgraded the US from A to A- and maintained a negative outlook on the country's credit.

Futures linked to the Dow Jones fell over 100 points post this announcement, before staging a brief recovery. Currently, the Dow Futures are down by 55 points. In regular trading, the Dow Jones fell for the fourth day in a row on Wednesday, declining over 250 points, while the S&P 500 and the Nasdaq fell 0.7 percent and 0.6 percent respectively.

Also Read: A $1 trillion coin and the US debt ceiling deadlline

(With Inputs From Agencies.)