Futures drop as Apple-led tech slide deepens
(Reuters) - U.S. stock futures dropped by up to 1 percent on Tuesday as a technology rout in the previous session sparked by concerns over iPhone sales sapped investors’ appetite for high-growth companies.
Shares of Apple Inc (AAPL.O) lost 1.4 percent in premarket trading, putting it on course for its seventh decline in the past nine sessions, and around 20 percent down from a peak earlier this year that valued it at more than $1 trillion.
Signs of slowing demand for the company’s flagship iPhones have wide-ranging implications for technology and internet companies at a time when investors are fretting over peaking corporate earnings growth, rising borrowing costs, and a global economy weighed down by trade tensions.
The FANG group of high-growth technology-focussed stocks continued to lose steam. Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Alphabet Inc (GOOGL.O) were all down between 1.5 percent and 2.01 percent. In the “bear market” terminology often used to discuss broader stock market moves, all four were close to fitting the criteria of a 20 percent fall from their record closing high.
Chipmakers Advanced Micro Devices Inc (AMD.O) and Micron Technology Inc (MU.O) both lost more than 3 percent while Nvidia Corp (NVDA.O) and Intel Corp (INTC.O) fell 2.3 percent and 0.5 percent respectively.
“It seems investors have two key concerns. One is the anxiety over the trade tensions narrative, and two, what will the Fed do next,” said Hussein Sayed, Chief Market Strategist at FXTM.
“With all three major indices trading below their 100- and 200-days moving averages and all the FAANG stocks in bear territory, it now requires a solid shift in fundamentals to revive confidence.”
At 6:55 a.m. ET, Dow e-minis 1YMc1 were down 125 points, or 0.5 percent. S&P 500 e-minis ESc1 were down 14.75 points, or 0.55 percent and Nasdaq 100 e-minis NQc1 were down 63.25 points, or 0.95 percent.
Comments by New York Federal Reserve President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance played in to the pressure on stocks.
Among other early movers, Target Corp (TGT.N) tumbled 5.9 percent after posting lower than expected third-quarter profit. Shares in home improvement chain Lowe’s fell 5 percent after it unveiled more restructuring plans in the face of worse than expected comparable sales numbers.
Reporting by Medha Singh in Bengaluru
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