S&P said that Russia's move to annex Crimea in Ukraine could also reduce investment, cause investors to pull money out of the country, and reduce overall economic performance.
It cut the outlook to negative on Thursday, meaning it could cut the country's credit rating within the next 24 months.
In response to Crimea's recent referendum to secede from Ukraine, the U.S. on Thursday widened the economic sanctions against a small group of Russian individuals to include more senior government officials. Sanctions also are being imposed on Bank Rossiya, which the White House said provides support to Russia's government.
"The United States today is today moving, as we said we would, to impose additional costs on Russia," President Obama said.
"These are all choices that the Russian government has made, choices that have been rejected by the international community," he said.