Market sell-off intensifies
The global market sell-off that started earlier this week due to an escalation in US-China trade tensions has intensified on May 9. Today’s steep falls in large tech companies are haunting investors, reminding them of the massive market sell-off in the fourth quarter of 2018.
At 11:56 AM EDT, the S&P 500 Index, the NASDAQ Composite Index, and the Dow Jones Industrial Average were trading with falls of 1.1%, 1.2%, and 1.4%, respectively, so far on the day. Let’s take a quick look at some of the worst performers in the tech sector.
iPhone maker fell below $200
American tech giant Apple (AAPL) fell below its key psychological support level of $200. At 11:56 AM EDT, it was trading at $198.49, a 2.2% fall.
In the last couple of quarters combined, Apple’s iPhone sales have fallen over 15% year-over-year. The company has blamed the slowing Chinese economy among other key factors for the weakness in its iPhone sales. An escalation in the US-China trade war could make the situation worse for Apple at a time when it’s already struggling to revive its Product segment’s sales in China.
Chip makers and others
American chip makers including Intel (INTC), NVIDIA (NVDA), and Micron (MU), are among today’s top tech underperformers. Intel, NVIDIA, and Micron are down 5.2%, 3.4%, and 2.6%, respectively, so far today, while Advanced Micro Devices (AMD) is down 1.5%.
In the last couple of quarters, chip makers such as Intel and NVIDIA have openly warned investors about the negative impact of prolonged US-China trade tensions. Nearly all chip companies could face the negative effects of a further escalation of the US-China trade war.
Due to these massive losses in tech stocks, the Invesco QQQ Trust, Series 1 ETF (QQQ) fell nearly 1.4% today. In the near term, only positive news about a US-China trade deal could help these stocks and the index recover.