The Nasdaq tumbled in afternoon trading on Thursday, dragged down by Apple (AAPL). Shares of the tech giant continued to fall after reports that China has forbidden government officials from using its iPhone and it plans to extend the ban to state companies. The move is a headwind for Apple in its biggest overseas market, which is also its global production base.
The Dow Jones Industrial Average (^DJI) remained the only index in the green, up a modest 0.3%. The S&P 500 (^GSPC) dropped about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) plummeted roughly 1% as Apple (AAPL) sank about 3%. All three major indexes closed in the red on Wednesday.
Unemployment claims fell to their lowest levels since February last week, another sign the Federal Reserve will likely keep interest rates higher for longer. The surprise reading followed Wednesday’s data showing US services activity at a six-month high in August, seen as a sign of resilience among consumers and in the broader economy amid higher borrowing costs.
Meanwhile, gains in Treasury yields (^TNX) have also weighed on tech stocks.
The run-up in oil prices (CL=F) that cast doubt on the Fed’s push to cool inflation took a step back on Thursday after China trade figures failed to ease worries about sluggishness in the world’s second-biggest economy. Questions are swirling about whether the slowdown in China could be a “top risk” to the US economy.
Those reports are feeding into the debate as to whether the Fed will be persuaded it needs to stick with high rates at its September meeting in a couple of weeks.
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