Source: Mint

Apple Inc. shares buckled after a rare analyst downgrade exacerbated another wave of selling pressure that wiped out hundreds of billions of dollars in market value from the largest US technology stocks.

The iPhone maker dropped 4.9% after Bank of America cut its rating to neutral from buy, warning of weaker consumer demand for its popular devices. The selloff erased roughly $120 billion from Apple’s market capitalization.

There were few places to hide on Thursday with investors dumping stocks as Federal Reserve officials continue to talk tough on raising interest rates in the central bank’s fight against inflation. There were just three gainers in the Nasdaq 100 Stock Index, which fell 2.9% and within spitting distance of its June 16 low. Amazon.com Inc. and Alphabet Inc. fell nearly 3%, while Microsoft Corp. dropped 1.5%. 

Meta Platforms sank 3.7% after Chief Executive Officer Mark Zuckerberg outlined plans to reduce headcount for the first time ever. The social media giant’s shares have fallen 59% this year amid slowing user growth.

Apple has been treated as a haven for much of this year, outperforming fellow mega-caps and the broader tech gauge amid a steep selloff driven by recession fears. The world’s most valuable company with a market value of nearly $2.3 trillion has now fallen about 20% in 2022, compared to a 32% decline for the Nasdaq 100.

With consumer spending expected to cool across regions, BofA analysts led by Wamsi Mohan said demand for Apple’s services has already slowed and product demand is likely to follow. Pressure from a stronger dollar will only add to its woes, they said.