- Apple revealed that its sales in China fell
- The news sent Wall Street tumbling once again
- The profit downgrade is rare
American tech giant Apple exacerbated the anxiety that has been plaguing Wall Street for the past few weeks after reporting a profit warning. The news sent shockwaves as the profit downgrade is rare for a company of Apple’s stature, and it also raises concerns about the stability of the world economy.
The Chinese market has always had huge retail potential for many of the world’s most well-known brands, so the reduction in iPhone sales is indicative of the Asian nation’s slowdown. Apple CEO Tim Cook noted that it’s not just smartphone sales that are affected; the company’s other products are also suffering the same fate at the moment.
Apple shares took a beating early in the week, based on recent numbers, and its stocks plunged 10% in just one day. Cook warned investors that most of the revenue shortfall happened in China.
“We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” Cook added.
Analysts note that Cook and Apple blame the current trade spat between China and the United States, which resulted in billions of dollars in tariffs. Cook’s explanation sent Wall Street tumbling as it has the same implications for other companies that conduct business in the Asian nation. The warning also affected European markets, according to reports. London suffered from heavy losses, as did Frankfurt and Paris.
Market anxiety increased further as US manufacturing figures hit the headlines. Investors are now more concerned than before, with many 2019 forecasts gloomier than expected. Both Nasdaq and the S&P 500 fell, dropping by 3% to 6,464 and by 2.5% to 2,448 respectively.