I predict there will be a sell off at the start, but that it will close not very different from the current level. The American investors are not stupid, for the most part. They are rich for a reason... because they know what they are doing. They factored the debt and the downgrade into the price level over a period of several months. Some of the amateurs will sell off at the start, but once they are out, the mature investors will take control.
Here is a different view: they believed that compromise on debt ceiling would happen, averting a downgrade. They knew downgrade was possible, but now it is certainty so they may further sell.