Dow Rally Vanishes; S&P 500, Nasdaq Follow
All of Wall Street’s major indexes pivoted lower Tuesday afternoon, which reflected a tepid pre-market for Dow futures. The Dow Jones Industrial Average initially rose by as much as 132 points before giving back gains later in the session. It would settle down 52.5 points, or 0.2% at 25,533.44.
Dow Jones Industrial Average walks back triple-digit gains at the start of the holiday-shortened week. | Source: Yahoo Finance.
The broad S&P 500 Index of large-cap stocks declined 0.2% to 2,820.05. Losses were widespread, with consumer staples plunging more than 1.1% on average.
The technology-focused Nasdaq Composite Index held onto gains as technology stocks outperformed. The index edged up 0.1% to 7,647.59.
Trade War Will Ravage iPhone Sales
U.S.-China trade war could ravage iPhone sales, according to Citigroup. | Source: REUTERS / Dado Ruvic
The ongoing trade war between the United States and China could have adverse effects on Apple. Analysts at Citigroup believe iPhone sales “could be cut in half” should Chinese consumers shift their purchasing preference to domestic brands.
“We are proactively slashing our iPhone unit sales as we believe the US/China trade situation will result in a slowdown of Apple iPhone demand in China as China residents shift their purchasing preference to China national brands,” Citi said, according to CNN.
Apple ranks as the sixth most heavily-weighted component in the Dow 30. It is also represented on the S&P 500 Index, and – further still – it trades on the Nasdaq. If Citigroup’s estimates are proven accurate, the technology sector as a whole could suffer significant losses as a result of the trade war.
Tech stocks in general and semiconductor companies, in particular, have the most to lose from a trade war. The Chinese territory of Taiwan is one of the most active regions for the semiconductor industry.
On Monday, President Trump said his administration isn’t ready to make a new deal with China, highlighting the fractious state of the current negotiations.
“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference with Japanese Prime Minister Shinzo Abe in Tokyo.
Apple admitted last year that it might have a China problem after the company downgraded its outlook on iPhone sales in the country. In its most recent quarter, Apple reported $58.02 billion in revenue, including $10.22 billion for Greater China.
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