Economy 24 minutes ago (Sep 28, 2022 07:06AM ET)
© Reuters. FILE PHOTO: Logo of an Apple store is in Washington, U.S., January 27, 2022. REUTERS/Joshua Roberts/File Photo/File Photo
(Reuters) – Apple Inc (NASDAQ:) shares fell 4% in premarket trading on Wednesday and piled pressure on other growth stocks following a report that the tech giant was dropping its plans to boost production of the latest model of its flagship iPhone.
Bloomberg earlier reported that Apple had told its suppliers to curtail efforts to increase the assembly of its iPhone 14 lineup by as many as 6 million units in the second half of the year on disappointing demand.
Shares of the world’s most valuable public company fell to $145.89 and were on track to open at a two-month low. [.N]
Other growth stocks including Microsoft Corp (NASDAQ:), Amazon.com (NASDAQ:), Google-parent Alphabet (NASDAQ:) and Tesla (NASDAQ:) Inc fell between 1.5% and 3% on the news.
“Weaker consumer demand is to be expected when utility bills are going up, interest rates are going up, mortgage costs are going higher … discretionary spending is going to be curtailed by that,” said Patrick Armstrong, chief investment officer at Plurimi Wealth in London.
“Apple is not immune to that and it’s probably symptomatic of what’s happening across many different companies right now.”
The rate-sensitive growth stocks have taken a beating this year on the U.S. Federal Reserve’s rapid pace of interest rate hikes.
The growth index has shed 29% this year, compared with a 17% slide in its value counterpart.
Shares of chipmakers fell on the news, with Apple suppliers Broadcom (NASDAQ:), Qualcomm (NASDAQ:) and Taiwan Semiconductor, Skyworks Solutions (NASDAQ:) and ON Semiconductor down in the range of 1.2% and 2.8%.
Apple’s suppliers in Europe – STMicroelectronics, BE Semiconductor, Nordic Semiconductor, ASM International (OTC:), Infineon (OTC:), and ASML – fell between 1.6% and 4.7%.