Stock exchange traded funds were set for a big decline Monday after Standard & Poor’s downgraded its triple-A credit rating on U.S. debt.  Dow futures slipped over 200 points before the bell while gold soared to $1,710 an ounce.

SPDR S&P 500 ETF (NYSEArca: SPY) fell more than 2% in Nasdaq premarket trading. SPDR Gold Shares (NYSEArca: GLD) vaulted about 3% as gold prices topped $1,700 for the first time. [Small-Cap ETFs May Signal More Pain]

The iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) traded higher by about 8% in preopen dealings. The exchange traded note rallied last week along with the CBOE Volatility Index, Wall Street’s fear gauge. [Debt Fears Stalk Equity ETFs After Jobs Report]

U.S. Treasury ETFs, meanwhile, were set to rally Monday in the wake of the S&P downgrade. Yields on 10-year notes tumbled below 2.5% in morning trading. Bond yields and prices move in opposite directions.

“S&P’s downgrade to AA+ of U.S sovereign credit had the immediate effect of penalizing risk assets, with 10-year U.S. Treasury futures rallying amid heavy losses for Asian equities and Nymex oil futures,” said strategists at Lloyds Bank, in a MarketWatch report.

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