'Technology companies have suffered their worst losses on Wall Street in seven years as stocks tumble after Apple announced slumping iPhone sales.
The rare news of disappointing results from the California tech giant reinforced investors’ fears that the world’s second-biggest economy was losing steam and that trade tensions between Washington and Beijing were making things worse.
The Dow Jones Industrial Average plunged 660 points on Thursday and the broader S&P 500 index fell 2.5 per cent following the California tech giant’s surprise profit warning.
Apple share prices plummeted 10 per cent, erasing more than $74bn (£58.5bn) in market value, after it downgraded its revenue forecast for the last quarter of 2018.
Technology companies and other major exporters, including heavy-machinery companies, also took big losses. Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.
“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at Markets.com. “Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”
Investors were also unsettled by a report on Thursday that showed signs of weakness in US manufacturing.
The US-China trade dispute threatens to upset multinational companies’ supply lines and reduce demand for their products. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses.'
Read more: US stocks plummet after Apple reveals iPhone sales slump
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