The 25-year-old competitor sank to the bottom of the pool after completing her solo free routine.
Fuentes, who won four synchronised swimming Olympic medals for Spain, immediately took action, diving into the pool wearing a t-shirt and shorts, before pulling the her swimmer to the surface. She was then assisted in bringing Alvarez to the pool’s edge.
The American was given medical attention before being stretchered away.
“Anita is much better; she is already at her best. It was a good scare to be honest,” said the Spaniard Fuentes to Marca newspaper.
“I jumped into the water again because I saw that no one, no lifeguard, was diving in. I got a little scared because she wasn't breathing, but now she's fine.”
In a statement on the USA Artistic Swimming Instagram page, Fuentes said that Alvarez was doing well and would take Thursday (23 June) to recover before a decision is made on whether she will compete in the swim free team finals.