Futures drop as Apple drops production, lower revenue limits losses

Futures drop as Apple drops production, lower revenue limits losses

By Shreeshi Sanyal and Susan Mathew

(Reuters) – U.S. stock index futures fell on Wednesday, led by Apple Inc (NASDAQ::) after it scrapped plans to boost production of new iPhones, but the decline in benchmark Treasury yields from multi-year highs capped the decline.

Shares of the world’s most valuable public company fell 3.7% in presale trading after Bloomberg reported that Apple asked suppliers to scale back efforts to increase assembly of the iPhone 14 family of products by up to 6 million units in the second half of this year.

โ€œApple has taken a lot of chops and any weakness in Apple demand has huge implications for many spaces, so even chips, processing and the outlook for retail sales,โ€ said Patrick Armstrong, chief investment officer at Plurimi Wealth.

The report on Apple’s production cut added fuel to investors worried about the US Federal Reserve’s bid to aggressively raise borrowing costs to tame stubbornly high inflation even with the risk of slowing economic growth.

Other huge growth names like Inc (NASDAQ :), Microsoft Corporation (NASDAQ:), Meta Platforms Inc, and Tesla (NASDAQ: Inc) also fell between 0.6% and 2.1%.

Advanced Micro Devices (NASDAQ), Qualcomm (NASDAQ ๐Ÿ™‚ Inc, Nvidia (NASDAQ :)), and Micron (NASDAQ ๐Ÿ™‚ fell between 1.5% and 2.8%.

However, some relief to stock markets came from the BoE’s decision to buy as many long-term government bonds as needed between now and October 14.

The yield on US 10-year Treasury bonds came from a 12-year high to reach a daily low of 3.886%, while the German 10-year government bond yield, the main indicator for the eurozone, fell after touching an 11-year high. . [US/] [GVD/EUR]

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Peter Cardillo, Chief Market Economist, Spartan Capital Securities LLC, said: โ€œReturns are now close to the Fed target of 4 and 4.5%. So once that happens we should see returns begin to stabilize and this should boost stock prices. “.

‘The market is very selling too.’

At 7:30 AM ET, it was down 85 points, or 0.29%, down 18.75 points, or 0.51%, and down 113.75 points, or 1%.

In the previous session, Wall Street’s major indexes sank deeper into a bear market, with their lowest close in nearly two years on fears of a rate hike.

Contrasting with the overall decline, Biogen (NASDAQ ๐Ÿ™‚ rose 45.9% after an Alzheimer’s drug, which it developed with Japanese partner Eisai, slowed cognitive decline.

Shares of Eli Lilly & Co (NYSE:), which is also developing a drug to treat Alzheimer’s disease, rose 7.7%.

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