Apple was the market leader as U.S. stocks fell sharply on Thursday as Wall Street once again experienced recession jitters, wiping out gains from a brief relief rally the day before.
To reach 3,640, the S&P 500 lost 79 points or 2.1%. Almost all of the stocks in the benchmark index decreased in value. The Nasdaq fell 2.8% while the Dow Jones Industrial Average fell 458 points, or 1.5%, to 29,225.
The decline in technology stocks was spearheaded by heavily weighted Apple (AAPL) shares, whose shares lost about 5% due to worries about waning demand that led to a downgrade from Bank of America.
In a note published on Thursday, analysts issued a warning: “BoFA’s research team expects the demand trajectory to worsen.”
Major Stocks Affected
Following a report that the tech giant Apple (AAPL) is abandoning plans to increase production of its new iPhones this year because demand has fallen short of expectations, Apple’s declines started on Wednesday.
In other business news, Meta Platforms (META) stated that it would be the first time in its history to restructure teams and reduce headcount. The company informed staff that the “macroeconomy remains tough and volatile.” Closed shares were down 3.7%.
Shares of CarMax (KMX) also dropped by almost 25% after the car buyer revealed second-quarter earnings that fell short of Wall Street forecasts, blaming “affordability challenges” for hurting sales.
The home goods retailer Bed Bath & Beyond (BBBY) also experienced a 4% decline on Thursday after the business reported a larger quarterly loss due to ongoing merchandising and inventory issues as well as inflationary pressures.
Why Are Stocks Plummeting
All three major averages are on track to lose most of the gains made after England’s central bank announced Wednesday that it would resume bond purchases to help stabilize financial and currency markets due to the market’s renewed aversion to risk.
Investors applauded officials’ recent reversal of their aggressive policy tightening tactics.
A market meltdown caused by the release of Prime Minister Liz Truss’ budget has also recently worsened the economic outlook. Treasury yields have risen to their highest levels since 2010, and the British pound has fallen to its lowest point in 37 years.
Treasury yields in the United States edged up on Thursday after rising — and then falling — at the quickest rate in decades. In the midst of the worst bond sell-off since 1949, the benchmark 10-year Treasury note, a key economic benchmark, briefly reached 4% on Wednesday.
One informal indicator of a recession is the U.S. economy’s two-quarter streak of contraction. However, the job market is still robust and consumers are still making purchases. This has boosted the economy and is making it more challenging to control inflation.
Raphael Bostic, president of the Atlanta Federal Reserve, stated on Wednesday that the decision by his central bank counterparts across the Atlantic to resume buying bonds did not alter his opinions regarding U.S.
Federal Reserve policy or fuel concerns that England’s economic problems could spill over.
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