Stainless steel is a very soft metal and therefore is prone to scratches. Apple claims that their stainless steel alloy is 80% stronger and more durable than the basic stainless steel alloy, but a lot of Apple watch owners have noticed microscratches already.
Originally Posted by Apple:
We started with an alloy known for its durability and corrosion resistance. Then we made it even stronger. Through a specialized cold-forging process, it becomes up to 80 percent harder.
You can fix these microscratches by buffing them out, but it does remove a layer of the stainless steel so you won't want to do it excessively. It won't work on deep gouges.
This method doesn't work on the aluminum Sport model, but the aluminum model isn't prone to scratches. So the screen on the Sport is more prone to scratches since it isn't sapphire glass, but the casing on the stainless steel is prone to scratches. It's a tradeoff.
Have any of you noticed scratches on your stainless steel Apple Watch?
Here's a video showing how to remove them: