The past couple weeks have been pretty rough for Wall Street and stocks took another tumble on Thursday. This time, it is tech stocks taking the biggest hit— suffering their worst drop in seven years—on the heels of Apple reporting iPhone sales in notable decline in China.
Apple rarely warns of such disappointing results, so anytime they deliver such news investors fear the future. And when this news mentions struggles in the world’s second-largest economy—in relation to trade tensions between Beijing and Washington DC—the outlook becomes yet more grim. In this case, though, the most recent US manufacturing report also showed surprisingly weak results, and that easily contributed to the sell-off.
But tech stocks were not the only ones who suffered losses. Shares across the Dow Jones Industrial Average slid, causing the index to nosedive 660 percent, just shy of 3 percent. The broad-based S & P 500 Index similarly fell 2.5 percent.
It is Apple, though, that matters in this particular case, plummeting a remarkable 10 percent and wiping out $74 billion of the company’s total market value. To put this into perspective this is about what Starbucks is worth and easily more than the worth of Caterpillar, General Electric, Lockheed Martin, Lowe’s, or Morgan Stanley.
Adding insult to injury, though, other major [China] exporters took big losses as well. This includes companies who manufacture heavy machinery as well as heavy-hitting tech companies like Microsoft and Intel.
We should all keep in mind, though, that US and China have been slapping new tariffs on hundreds of billions of dollars-worth of various imports thanks to the trade war sparked by sanctions by US President Donald Trump. This trade war has restrained supply lines for multinational companies, which has reduced demand for their products. Indeed, companies such as Caterpillar, Daimler, and General Electric have all reported that the trade tension and slowing growth in China continue to damage their businesses.
All in all, by the end of the day, the Standard & Poors fell 62.14 points to close at 2,447.89 on Thursday. The Dow Jones Industrial Index also closed down, at 22,868.22 and the tech-heavy Nasdaq fell 3 percent (202.43 points) to close at 6,463.50.