The S&P 500 and Nasdaq fell on Thursday with Apple leading declines in megacap growth stocks on concerns over China’s iPhone curbs, while weaker-than-expected jobless claims data stoked worries about sticky inflation.
Apple (AAPL.O) dropped 3.6% on news that China has widened curbs on the use of iPhones by state employees, requiring staff at some central government agencies to stop using their mobile phones at work.
Other megacaps Tesla (TSLA.O), Nvidia (NVDA.O) and Amazon.com (AMZN.O) fell between 1% and 3.4% in early trading.
Shares of Apple suppliers including Skyworks Solutions (SWKS.O), Qualcomm (QCOM.O) and Qorvo (QRVO.O) also slid between 4% and 5.3%.
The S&P 500 information technology index (.SPLRCT) fell 2.0% while the Philadelphia semiconductor index (.SOX) slipped 2.7%.
“If you’re invested in stocks you want the economy to slow but not collapse, so any strength in the economy is going to lead people to believe that the Fed is going to possibly raise interest rate in September,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Wall Street’s main indexes ended lower on Wednesday after a report highlighted robust service-sector activity last month.
Traders’ bets on the Fed leaving interest rates unchanged in September stood at 91%, while their odds for a pause in the November meeting were at 51.7%, down from nearly 59% a week earlier, according to the CME Group’s FedWatch Tool.
Further denting sentiment, data showed China’s exports and imports fell in August, with sagging overseas demand and weak consumer spending hitting businesses in the world’s second-largest economy.
Shares of U.S.-listed Chinese firms including PDD Holdings (PDD.O), JD.com , Baidu and Alibaba fell between 3.4% and 4.5%.
Investors await comments from at least six Fed speakers, including policy voting members Philadelphia Fed President Patrick Harker, Vice Chair and New York Fed President John Williams, due to speak later in the day.
At 9:38 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 14.26 points, or 0.04%, at 34,457.45, the S&P 500 (.SPX) was down 26.88 points, or 0.60%, at 4,438.60, and the Nasdaq Composite (.IXIC) was down 193.72 points, or 1.40%, at 13,678.75.
Helping keep the Dow afloat, McDonald’s (MCD.N) rose nearly 1% after Wells Fargo upgraded the stock to “overweight”.
Automation software firm UiPath (PATH.N) added 3.8% on an upbeat annual revenue forecast after it topped estimates for second-quarter results.
Declining issues outnumbered advancers by a 1.79-to-1 ratio on the NYSE and by a 2.41-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 10 new lows, while the Nasdaq recorded 8 new highs and 99 new lows.
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