A three-dimensional model for deformation of metal matrix composite with aluminum matrix and silicon carbide reinforcement particles is developed. The model accounts for an internal structure of the composite, as well as rheology of its constituents. The model is further used in numerical simulations in order to study the evolution of stress-strain state parameters in a randomly-chosen composite microstructure fragment under uniaxial tension and compression loading on micro- and macroscale. The parameters include the stress stiffness coefficient, the Lode-Nadai coefficient and equivalent (von Mises) strain. It is found that local deformation regions and internal tensile stress concentration regions appear in the material of composite matrix. Adhering to a phenomenological damage theory, a damage development is computed in the matrix metal. We present damage fields and damage distributions for uniaxial tension and compression.