Apple stock crashed
On January 3, Apple (AAPL) stock nosedived ~10% to close at $142.19, its biggest single-day drop since July 2017, after its CEO, Tim Cook, warned investors about a cut in its guidance for the first quarter of fiscal 2019, which ended in December.
In a letter disclosed on January 2, Cook revised the company’s sales and earnings guidance for the quarter, citing a slowdown in China. The stock was also down 8% in premarket trading on January 2.
Market indexes, suppliers, and peers also fell
Apple’s sales warning not only hit its stock hard but also created mayhem across the markets. Most technology stocks, as well as the stocks of Apple’s suppliers, plummeted on January 3. The market indexes in the United States, Japan, and South Korea slumped after Apple’s worries hinted at a global slowdown.
The Dow Jones Industrial Average fell 660 points, or 2.83%, to 22,686.22. The S&P 500 Index fell 2.48%, and the technology-heavy NASDAQ Composite Index shed 3.04% on January 3. Japan’s Nikkei and Topix fell 3.09% and 2.32%, respectively, while South Korea’s KOSPI Index also witnessed its lowest intraday level since December 6, 2016.
Apple’s US-based suppliers, including Cirrus Logic, Qorvo (QRVO), and Skyworks Solutions (SWKS), and chip stocks such as Analog Devices, Broadcom (AVGO), NXP Semiconductors, and Micron Technology (MU) were all down at the end of the trading day following the big cut in Apple’s guidance as weak iPhone demand loomed.