Market Watch: Apple’s Downturn and Tesla’s Troubles Reflect Tech Sector’s Struggles

Market Watch: Apple’s Downturn and Tesla’s Troubles Reflect Tech Sector’s Struggles

As the stock market opens today, eyes are on Apple Inc. and Tesla Inc., two tech giants that have been facing significant challenges. Apple’s stock fell almost 2% ahead of Tuesday’s opening bell, continuing a downward trend that has seen the company’s shares drop by nearly 10% year-to-date. This underperformance is stark against the backdrop of the Nasdaq 100 and S&P 500, with Apple lagging behind by about 16%.

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The decline in Apple’s fortunes can be attributed to a 24% year-on-year fall in iPhone sales in China during the first six weeks of 2024, as the company grapples with increasing competition from domestic brands like Huawei. Adding to Apple’s woes is a hefty fine of 1.84 billion euros ($2 billion) imposed by the European Union for anti-competitive practices related to its App Store, marking the company’s first penalty for breaching EU rules.

Tesla’s situation is no less dire, with its stock value plummeting by almost 25% for the year. The electric vehicle manufacturer saw a sharp 7% drop in its stock on Monday following a reported decrease in sales in China during February, likely affected by the Lunar New Year holiday period.

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Alphabet Inc., the parent company of Google, has also not been immune to the tech sector’s downturn, with its stock down almost 5% for the year, despite the S&P 500’s overall 4% increase.

 

Illustration shows Tesla logo and Elon Musk silhouette
This marks the highest level of online sales since February 2022.

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These developments come amid China’s announcement of an ambitious 5% economic growth target for 2024, which has led to a modest rise in mainland stocks. The tech sector’s struggles reflect broader concerns about China’s economic slowdown, geopolitical tensions between the U.S. and China, and the upcoming U.S. elections.

Investors are closely monitoring these tech giants as they navigate through these turbulent times, which could signal a broader shift in the market landscape.


Source : AP NEWS

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